"Bad
government drives out good business." ~ Mark Skousen (the fascist corrollary
to Gresham's Law concerning bad money driving out good money)

"One
of the saddest lessons of history
is this: If we have been bamboozled
long enough, we tend to reject any
evidence of the bamboozle. The bamboozle
has captured us. Once you give a charlatan
power over you, you almost never get
it back." ~ Carl Sagan (astronomer)

"All
you need to look at are two markets
right now, the Japanese and USTreasury
markets. They have crossed two round
numbers, 1% and 2% respectively. This
cannot continue, and rates cannot
go up, or else the entire system will
collapse in a heap into one giant
black hole of insolvency. Forget about
banks and insurance companies. Forget
about housing. Forget about equity
values. Forget about the economic
ramifications. Think derivatives.
The few $trillion of these USTreasury
securities have a leech market attached
to them. This market is at a minimum
100 times the size of the paper market
itself and is where the banks trade
amongst themselves. Someone, somewhere
is going to lose, lose big and go
broke, which of course will break
the daisy chain of false values and
solvency." ~ Bill Holter

"The
largest holders of Japanese Govt Bonds
are indeed vulnerable. The reason
is straightforward. The Japanese have
been issuing debt like the United
States recently.
They do not have a Yen OTC Swap complex
to create the artificial demand for
their government securities which
could muscle rates like the Exchange
Stabilization Fund does for the USTreasury
via USDollar. Refer to the denominated
Interest Rate Swap contract and the
Forward Rate Agreement. The Japanese
therefore rely much more on naked
purchases by the central bank (Bank
of Japan)
for their securities to keep rates
low. In my opinion, the practice
is like putting blood in a shark tank
regularly." ~ Rob Kirby

"A
year ago my missionary friends CS
and his son G were visiting my house.
G has an Italian friend who worked
in Washington state. On the job, the friend wandered in to a huge warehouse
full of guillotines. A co-worker saw
him and told him he was off limits.
The Italian worker told GS, and got
scared, then quit the job. He re turned
to Italy.
I now read your Hat Trick Letter and
you mentioned FEMA camps with these
guillotines. G is reliable. Wow!" ~ a new Hat Trick Letter subscriber (consider the camps a modern upgrade to
the Auschwitz and Dachau types from WW2)

CORRECTION: The Arizona Governor vetoed the bill that would have made Gold &
Silver money. The veto occurred on
May 3rd, but the Jackass did not notice.
The trend toward sound money has regular
and powerful interference. One can
be sure that Governor Jan Brewer was
given extraordinary pressure by the
federal government ministries, maybe
the White House. The claim of lost
revenue is bogus, since transactions
could have been tagged for taxes.
Yes governor, honest sound money does
have an advantage, that being avoidance
of swindles. In Virginia and Indiana,
similar bills for sound money were
also killed, or tabled to death. The
entire system is very devoted to its
continuation, whether by inertia or
coercion. See the Reuters article
(CLICK HERE)
or the Yahoo article (CLICK HERE
).

## INTRO MONETARY FRAGMENTS

◄$$$ A PLAN IS AFOOT FOR AUTUMN CONVERSION OF THE USDOLLAR, WHICH WILL
INVOLVE A DEVALUATION. AT LEAST THREE
COMPETING PLANS ARE ON THE TABLE.
THE ONLY CERTAINTY IS SOME RESOLUTION
WITH A LOWER VALUED USDOLLAR FOR DOMESTIC
USECONOMY USAGE. IMPORTED PRICE INFLATION
WILL RESULT. INSTITUTIONS WITH FOREIGN
USDOLLARS WILL SURELY NOT COMPLY,
WHICH WILL FORCE AN INTERNATIONAL
USDOLLAR WITH INDEPENDENT VALUE. THE
SPLIT AND SCHISM IS NEAR. AS FOOTNOTE, THE USGOVT
SECURITY AGENCIES ARE BETTING ON A
BIG UPWARD MOVE IN THE SWISS FRANC,
STUFFING BILLS IN LARGE SWISS HOMES.
$$$

An October conversion to new Republic Dollar is being argued, as a tenative
proposed plan. Something must be done,
and the competing powers have been
in discussions that resemble summit
talks and surrender meetings, all
conducted in secrecy. The only certainty
is the imposition of at least a 20%
devaluation. My firm belief is that
it will be repeated. Like seen in
Venezuela,
the devaluation has been delayed so
long, that it will come in vicious
waves. My source is a fellow with
White Dragon contacts for over a year,
several meetings done in Costa
Rica. They are
interested in acquiring farm land
in CR, while they have seen fit to
firm up the CR central bank with a
$5 billion donation last summer so
as to establish good will. When
verification was sought, The Voice
claimed of being aware of at least
three plans floating for USD conversion,
in competition.

The plan includes calling all USDollars home, including from foreign accounts.
The foreign banks will be urged to
cooperate in the conversion, but without
authority over them. This is precisely
where the conflict will arise. Foreign
banks and their major USD account
holders will be relucant to permit
the USGovt any dictated devaluation.
Instead, expect defiance that results
in a split, a major schism in the
USDollar regime. The entire program
has a secondary motive, in addition
to the deserved USD devaluation, which
is to target narcotics competitors.
The USGovt security agencies have
a veritable monopoly on global narcotics,
possibly 75% to 80% control. Colombia,
Russia
& Chechnya, and Hong Kong are
other competitive areas. Regard the
move as an attempt to trap narco cash
hidden in the world. Other centers
of dirty USD money are Mexico, Panama,
Tokyo, Singapore,
Switzerland,
and Cyprus. Expect no success
whatsoever in calling foreign USD
funds home to the United States for processing,
devaluation, and redistribution, absolutely
none! The result, regardless of
which plan is executed, will eventually
form the split into a domestic devalued
USDollar and a foreign independent
USDollar. The spread will be 20%
initially, the domestic USD lower.
Later after more devaluation steps,
the spread will be closer to 50%.
After all, the USDollar on its fundamental
merits is a Third
World currency.

Consider the forces at work in foreign nations. The refusal by dark centers
of criminal organizations could lead
the USD split, almost a guarantee.
Human nature will dictate for continued
control and dismissed domestic price
hikes for goods. The refusal by foreigners
will be motivated by a desire to avoid
a nasty commodity inflation jump will
all the social disorder side effects.
They would rather the United States
suffer that impact alone, since they
regard the USFed central bank, the
Wall Street bankers, and the USGovt
with its vast military machine to
be the responsible agent for the tumultuous
ongoing crisis, unending disruptions,
and intractable problems. Expect
retaliation against US banks in foreign
nations, like open violence. The narco
syndicates outside the United States are powerfully
entrenched. The narco banks and their
powerful friends in political leadership
posts will push for the split. It
will come from defiance and disobedience
against the US
authorities. This will cause a split
into two USDollars. The devalued version
will be managed inside the United
States, while
the foreign international USDollar
will be upheld in value outside. It
will be full of intrigue how the international
USD is valued on the FOREX, independent
from the domestic slammed USD. The
domestic USD will be vulnerable to
repeated slams as it seeks its true
value, based upon the fundamentals
of huge deficits and almost no buyers
of its debt securities (the USTreasury
Bond). Expect the USFed to be rendered
toothless, as it operates its Weimar
machinery in the newest Third
World nation, the de-industrialized
United States of Amerrka. It is a
land of the most uninformed and misinformed
in modern history, according to Paul
Craig Roberts.

The impact will be a big price inflation hit to the USEconomy. The initial
hit will be an immediate 20% inflation
hit from the import channels alone.
Whatever the USEconomy imports in
paid USD form, will cost 20% more
as a result. If for instance, half
of the USEconomy supply lines are
imported, then the final impact
will be a sudden 10% splash to US-based
price inflation. The Canadian
Economy should expect a bigger total
net impact, more like 20% since its
supply lines are almost totally in
USD terms. The social impact will
be some introduced disorder. The authorities
who are making decisions on the plans
expect civil disorder and lost control
on the streets. The Jackass completely
agrees, but with an added point that
violence will arrive with the second
devaluation, as debate and criticism
will arrive with the first devaluation
accepted with stunned reaction.

The White Dragon plan includes two highly dangerous additional elements for
cleansing. They have identified the
vile element in global banking, and
target it for some degree of ruin.
Their plan rumors for shutting down
all but two unidentified Rothschild
banks, intended as a message to what
they regard as the problem niche within
world banks. Their plan also includes
the arrest of 6000 bankers of various
rank, the arrests to be kept as secretive
as possible. The location is unclear,
but the undersea Caribbean
location was mentioned again. By April
2012, an estimated 450 bankers had
been arrested. The current count was
not cited, but assurance was that
at least double the last reported
figure a year ago. When pressed to
explain the enforcement of arrests,
the source mentioned Interpol and
US
marshalls, under contract on hire.
They even have solicited the USMilitary
high brass, which stand apart from
the narcotics element.

A different source with USGovt security agency contacts was solicited for opinion.
He is not connected either to The
Voice or to the White Dragons. He
was not aware of any specific plans,
but had heard frequent stirring about
competing high level USDollar devaluations
in the offing. He pitched in a gem
of information. Several large houses
in Switzerland
owned by the US
security agencies are being loaded
with cash to the gills. Every room
has blocks of shrink wrapped Swiss
Franc bills. These are the American
drug lords operating under USGovt
protection by the syndicate. The Swiss
Francs are not held in Swiss banks.
They anticipate a grand upward
move in the Swiss Franc, totally in
synch with the Jackass analysis and
forecast over the last two years.
The Swiss-Euro 120 peg will fail eventually,
and produce a massive 20% to 30% rise
in the Swiss Franc, which will emerge
as the surviving European currency.
Current pressures in the Swiss Parliament
to force disclosure of US citizen
bank accounts appears to be motivated
as an obstruction toward realizing
a safe haven with a gain. Note that
Liechtenstein has no border, and shares usage
of the Swiss Franc in its economy
and banks. One is left to wonder in
what form the collection of containers
stuffed with older USDollar $100 bills
will be modified, held in Greek ports
owned by the USGovt agencies. These
are narco funds, but are small volume
really. Each container contains perhaps
a few $billion when one calculates
that 10 million such US$100 bills
equals a mere $1 billion in value.
Much US narco funds were converted
a few years ago to ownership of the
Vatican gold
hoard, worth over $1 trillion.

The US security agencies are making a gigantic bet
that the Swiss Franc will rise in
a big quantum move up. Another implication
is that the Swiss Franc could serve
as refuge as the Euro currency is
wrecked, amidst the dismantled Euro
Monetary Union. In the grand revaluation
plan, the global reserve currency
will temporarily be the Swiss Franc,
during the chaos. The grand victim
will be the Swiss National Bank, since
it has been enforcing the disastrous
Swiss-Euro peg with diversified purchases
of British Pounds and Japanese Yen.
Everything the Swiss central bank
has done so far has lost huge amounts
of money. Despite the Swiss Franc
being a high valued item, the Swiss
banking system is a total and complete
wreck. Big money, important money,
powerful money, has already left the
Swiss hills. As a savvy contact once
stated, "Switzerland is a wonderful great place, populated
by the wrong people." Do
not confuse the new US Republic Dollar
with the new Franklin
US$100 bills with higher security
features.

◄$$$ THE FATE OF CANADA FROM ANY USDOLLAR DEVALUATION
WILL INCLUDE TREMENDOUS STRESS. THE
CHINESE FACTOR ALREADY WORKS LIKE
A CARVING KNIFE TO CREATE TWO CANADAS. $$$

It is certainly hard enough to figure how the USDollar will be devaluated, which
is the tremendous huge quintessential
question of all, since the global
reserve currency. The impending USDollar
devaluation should result in price
inflation on all imports in a shock
wave. Incomes will not rise in offset.
A grand struggle will occur to disconnect
commodity prices from their USD pricing
system. The entire barter system is
designed to render a bilateral driving
force to pricing, which will avoid
the monolithic and hegemonist USD
pricing system. With 12% of the Hat
Trick Letter client base being Canadians,
a concern is steadily conveyed over
the fate of Canada.
Some key Canadian colleagues have
always disagreed on whether the Canucks
are any different. On all matters
of great importance, they follow the
US down the rat hole
with diligent devotion in deep criminal
pursuits. They are the same on leadership
roles, fully coopted, but vastly different
on cultural and awareness issues.
Their accent remains charming to the
Jackass.

Cases in point for Canadians serving as US Big Brother
devoted squires include gold sale,
bank derivative buildup, war commitment,
compliance with virus vaccination,
and acceptance of terrorism propaganda.Permission of genetic food modification remains in the balance. In my
view, Canadian leadership is an extension,
an appendage of the USGovt. They are
either dedicated or intimidated into
subservience. The Canadian Govt relinquished
their gold (like total idiots) in
order to follow the USGovt game led
by the corrupt Wall Street bankers.
When the entire system was on the
verge of collapse in the 1990 decade,
the big Canadian banks followed the
Wall Street lead again, with giant
slices of derivatives placed in key
foundation beams among major Toronto banks to support the national banking system.
My full expectation is that any devaluation
for the USDollar would render very
similar net effects to the Canadian
Economy. The conclusion, better described
as punitive solution, should result
in national systemic failure for both
nations. A lesson can be learned
from the 2004 to 2010 period. As the
USD fell in value, the price inflation
effect was stark across the entire
supply chain to the Canadian Economy.
Upon further examination, the Jackass
learned that for stability reasons,
Canadian suppliers prefer to form
contracts in USD terms. The widespread
practice leaves their economy vulnerable
to currency based inflation, even
when originating with the USDollar.
One more piece of evidence that the
Canadian nation is an extension of
the United
States. The simplest
example is to realize that from orange
juice to tobacco, Canada imports from the US.

No fate of Canada can be properly discussed without inclusion
of China.
It is the biggest single factor in
the evolution of the great nation
to the north. In my view, the influence
of China will act like a great carving knife. The
Western provinces gradually have become
Chinese colonies, vis-a-vis minerals
& resources. The Chinese already
own every major Canadian seaport facility
on the Pacific
Ocean, and own an increasing commitment
of energy and agricultural output.
My full expectation is for Canada
to split into East versus West, two
governed nations that emerge from
crisis. The West will be rich in natural
resources, will operate with large
surpluses, but will be unwilling to
pull along the damaged Eastern provinces.
The East will be racked by debt and
destroyed economic structures, whose
industries will be in disarray. Labor
problems will be common. The Eastern
provinces gradually will falter from
the industrial side. As whiplash,
any rising Can$ (from falling USD)
will cripple the Ontario
manufacturing sector. The effect has
been very clear for the last several
years, as efforts to maintain parity
at 100 have been fierce.

The grand-daddy conclusion from the USDollar devaluation is unavoidable. It
will work to dissolve the US union. It could (should)
split into 5 to 6 territories, as
the federal side enters debt default
receivership, and collapses from insolvent
internal rot and pervasive corruption.
Being a US
patriot, the Jackass wishes for honest
leadership for the nation of 300 million
people. They deserve competent leadership
with their interests held close to
the heart, not corporations, not defense
contractors, and certainly not bankers.
The corporations have betrayed the
nation of workers, somewhat in response
to labor unions and environmental
laws. The defense contracts work side
by side with the fascists who took
control starting with the Vietnam
War. The Wall Street bankers have
been closely aligned with fascist
forces for a long time, having made
large bank loans to the Nazis before
World War II. My best forecast is
that Canada
could as a result split into two nations,
East versus West, the East ruled under
crisis management, the West managed
by China like a colony. But the maritime provinces will remain fishing villages,
without much change, still suffering
from a lack of men and surplus of
women. Extraordinarily difficult forces
are at work.

◄$$$ THE QUESTION OF ?WHEN? ARISES SO FREQUENTLY THAT IT DESERVES TO BE
ADDRESSED. WHEN THE SYSTEM COMPLETELY
BREAKS DOWN, WHEN THE USDOLLAR REGIME
FALLS APART IRREPARABLY, WHEN THE
GOLD PRICE IS FINALLY RELEASED, WHEN
THE BIG BANKS SUFFER A CONTAGION OF
FAILURE, THESE ARE KEY QUESTIONS FOR
OUR AGE. ALTHOUGH NO ANSWER CAN ADEQUATELY
BE GIVEN, ONE CAN BE ASSURED THAT
WITH EACH PASSING MONTH, THE PLATFORMS
ARE MORE BROKEN, THE DEVICES MORE
ELUSIVE IN CONTROL ROOM ACTION, AND
THE PLAYERS MORE ISOLATED WITH UNSPEAKABLE
STRAIN. THE TIME BETWEEN MAJOR EVENTS
IS SHORTER EACH SEASON AND EACH MONTH.
$$$

By the end of year 2013, the game will be much more visibly over, but the remnants
of old power machinery will be still
there. The table will be more round
(equitable) and less hierarchical.
Some enormous jockeying and bargaining
is going on. Expect some possible
staggering events. This is an event
driven scenario that continues apace
in its destructive element. The Boyz
in the criminal syndicate are losing
their control, running scared, trying
to cut deals. They know they are finished.

The Jackass does not have magic answers. Sending emails asking when this or
when that will happen accomplishes
little. We do not know. But with each
season, enormous additional damage
is done to the control rooms as the
major tyrant players lose yet more
control. In five years, no way can
the system be like today. In two years,
no way. In one year, highly doubtful.
In a few months, possibly they will
keep the game going and the tables
spinning. But very soon, the game
will be altered forever in unmistakable
ways, with new Knights sitting at
the Round Table. This is key, since
the current table is not round. It
is rather hierarchical today, with
a vertical power structure. What comes
is more flat, more fair, more equitable,
more decentralized, more diversified.
The hierarchical systems cannot
defend against flat relational attack.
Barter and Gold are great arbiters.
The system will change radically and
noticeably when it is ready, when
conditions are ready, when players
are agreed, when high powers feel
the time is right. When the USDollar
and USTBond are more totally broken,
to the extent that they can no longer
stand on their own structural integrity.
When the US financial derivative support
mechanisms are more visible and broken,
even under attack. When the Eastern
forces refuse to play the USD/USTB
game any longer. When the USD/USTB
continuation results in much greater
ruin that becomes unacceptable and
intolerable. When foreign nations
refuse to see their stored wealth
played with, preyed upon, altered
in value, and stolen.

This is an event driven schedule, requiring completion
of events to proceed to the next dangerous
stages. It could be a few months, could be
another year, could be ad nauseum.
Why ask? Obviously, curiosity overcomes
reason. In my opinion, those who ask
when do not comprehend the event driven
schedule and its iron rule. Too much
doubt swirls in misdirection. Few
comprehend the events that must occur
in sequence. Some basic questions
back at you folks. If there are at
least three major plans to retire
the USDollar, forcing the domestic
version into devaluation, why has
the implementation of the best plan
not happened yet? Who are deciding
the fate of the corrupt USD/USTB regime?
With what penalty for decades of criminal
activity? Who is in charge? How much
Gold do the deciders have in possession?
How are they using the Gold? What
legal enforcement is involved? What
leverage do they have in enforcement?
What deals are being struck on the
next chapter and castle rulers? What
further destruction (eugenic genocide)
has been agreed upon? Which players
have been decided to kill off as part
of the solution? Are all the powerful
players involved human? Do you sense
the extraordinary complexity? When?
The Jackass does not know, and neither
do my best sources, nor do other very
well informed people. The only certainty
is that the system cannot continue
without breakdown and collapse. The
only certainty is that those with
significant Gold & Silver holdings
will survive, even possibly thrive.

However, know this. The time between big disruptive events
is shorter with each season. The damage
to the structural systems is much
greater with each season. The system cannot continue like this for too many more
months, as the entire platforms are
falling down, unable to function like
in the recent past. Eric Sprott thinks
the official Gold price goes way past
$2000 this year, but methinks that
is a careless comment that harms his
scintillating superb reputation. One
might ask $2000/oz but where? what
market? what country? By the end
of 2013, it would be entirely likely
to see the COMEX in a position where
it is more ignored by the multitudes,
where its price is mocked, where its
market executives are in defense of
lawsuits for contract fraud. In
my view, the attitude taken by the
masses toward COMEX & LBMA generally
would be a great indicator of freedom
for Gold to run and rise, and for
the powerful cabal to splinter. The
exchange with inventory appendage
is under seige by some colossal world
powers who seek to toss them out,
to remove them, to eliminate them,
to put them away, to assure of no
return. The details might not be fully
known 15 to 20 years into the future.
The details might not be any better
known than the Pearl Harbor attack,
the JFKennedy assassination, the Vietnam
War motives, the Oklahoma City attack, or the World Trade Center
attack. The important requirement
is that the banker cabal has its teeth,
arms, and testicles excised and burned
at the nefarious altar they worship
with fire.

To be sure, Russia & China are to be much more involved in the future
global control rooms. Depending upon
the sincerity and good faith displayed
by Western bank leaders, the fate
of the criminal cabal will be determined.
If not careful, they will find themselves
to be headless horseman with little
prospect of continued pleasures above
ground. My sources indicate clearly
that every few weeks, the Kremlin
and the Beijing leaders reject the next flimsy Western proposal that grants
the new Eastern elite simple scraps
at the head table. The London
& New York dons insist with delusion to be kept on as global kings knights.
The Russians & Chinese want some
significant change, a complete overhaul
of the USD/USTB regime that has corrupted
wealth and power for over four decades.
They want certain changes that forever
remove the devices for control that
has prevailed for a century. They
want the bank control around their
necks to be eliminated, and the skimming
for the bank cartel to end. They want
a legitimate Gold trade system founded
in fair barter. They want a value
based system centered upon Gold, and
they will get it!! The Eastern
powers will install a Gold Standard
outside the banking and currency system,
decentralized across the world, and
force the West to adapt to it.
The adaptation will be centered on
decisions to avoid desolation in the
new Industrialized Third World.

◄$$$ TURKEY FACES TUMULTUOUS CHANGE.
THE NATION IS A TIPPING ELEMENT IN
THE GLOBAL EQUATION. IT HAS MADE AN
IMPORTANT DECISION IN JOINING THE
SHANGHAI
COOP ORGANIZATION. ITS ROLE OF GOLD
INTERMEDIARY BANKER WILL BE VITAL
IN THE NEW GOLD TRADE STANDARD. THE
WILD CARD IS THE USMILITARY NARCOTICS
ABUSE AT THE INCIRLIK AIRBASE IN TURKEY
FOR HEROIN DISTRIBUTION ACROSS EUROPE.
VIOLENCE HAS SPREAD ACROSS TURKEY,
AS THEIR PEOPLE REJECT THE FASCIST
REGIME TIED TO THE WEST. $$$

Street violence has erupted in the Greek neighbor nation to the east. The last
few years of Erdogan have resulted
in severe revulsion by the people.
They are not docile like in the United States. They are vocal,
emotional, and active in defiance.
They do not organize into anti-banker
groups (e.g. Occupy
Wall Street) or into political reform
factions (e.g. Tea Party) or embark
on public demonstrations with sit-down
movements. They hit the streets and
bust things up. The nation of Turkey is frustrated at the
top with refusal to join the European
Union. Turkey recently showed defiance
by signing with the Shanghai Cooperation
Organization (SCO), the security bloc
dominated by China
& Russia
that includes the Central Asian states
and isolated other states. In many
critical ways, Turkey
has turned eastward.

Turkey is the first NATO state to establish
such a relationship with the SCO.
More disruption on the global balance
is to come. Turkish Foreign Minister
Ahmet Davutoglu described the signing
of the SCO cooperation agreement.
Referring to NATO and SCO, he said
"If we look from a Cold War
perspective, these may seem like mutually
exclusive institutions. However, the
Cold War has ended. Turkey will not be a slave of the Cold War logic."Turkey
is the tipping point nation. The USGovt
has pressed the issue, arguing that
NATO and SCO are incompatible security
organizations. But Ankara skillfully
argued in rebuttal that neither Russia
or China are considered enemies of
NATO on the other side of the Cold
War. While many scholars believe
the SCO pact was meant to send a political
message to the European Union commissars,
the Jackass believes the event is
more a tipping point toward commerce
and Gold Trade settlement. The establishment
of a Gold Trade Standard will emerge
from the East, with Turkey
playing its typical role over centuries,
that of gold trade intermediary. It
has been a huge gold banker for the
entire Middle
East for decades. The breakdown of
Europe has left Turkey
seeking alliances to the East, where
it can become a banking power potentially,
in gold provision toward trade settlement,
even to rival London.

Turkey is the great swing state. Watch its
NATO membership come under fire, and
maybe the US-led narcotics abuse of
its air force bases come under great
scrutiny. One is left to wonder if
they will permit future Incirlik AirForce
Base abuse with its gigantic heroin
distribution across Europe
to other NATO bases run by the USMilitary.
The United States thus violates the integrity of almost
every European nation. Turkey
is the major hub for narcotics distribution
across all of Europe,
the gateway to the West for American
narcotics. It is the nasty giant secret
that leaders and bankers never discuss.
In 1990, a mere 7% of US heroin came from Afghanistan. Nowadays, over 70% of heroin consumed
in the United
States comes
from the Afghan nation.

Other tipping points are France on European sovereign integrity, LIBOR on
London banking
criminality, Cyprus on energy & banking,
Swiss Allocated Gold Accounts on the
gold market, and MF-Global on futures
contract fraud. The Turkish leaders
and people are fast realizing that
their Islamic heritage is shared more
by the Eastern nations already within
the SCO fold, especially the former
Soviet Republics. Refer to Kazakhstan,
Kyrgyzstan, Tajikistan,
and Uzbekistan,
which joined with China
and Russia in 2001 to form the SCO as a regional security
bloc to defend against threats posed
by radical Islam and drug trafficking
from neighboring Afghanistan.
The SCO charter also addresses cultural
issues. Watch the narcotics issue
surface gradually, and the finger
pointed at the USGovt and its USMilitary
machine that earns over $800 billion
in narcotics related profits per year
from Afghan sources, where a vertically
integrated business has been created,
complete with chemical processing
plants, a Baghdad bank clearing house
managed by JPMorgan, and NATO distribution
of narcotics product through the Turkish
gateway.

Ankara still has major differences with China and Russia, but the overarching motives are beginning
to show as prevailing. The differences
will be worked out regarding Syria
with Russia and regarding the Uighur Turks in the Xinjiang
province
of China.
The trump card is trade, and always
has been trade. Turkey's dreams of EU membership are shattered,
not to be revived. The deluded expert
analysts believe Turkey can still court EU
membership. To join a sinking divided
derelict vessel seems pure folly.
Such stupid reasoning is only explained
by the paycheck sources for the errant
analysts. Ankara
will turn toward Russia & China, mend fences, and forge a new role in compromise
in its gold intermediary banking role.
The role is a major missing piece
to the Russian & Chinese plan.
See the Voice of America article (CLICK
HERE).

At the ground level, Turkey and its citizens are
sickened without further patience
toward the growing fascism imposed
by Erdogan, complete with all the
small creeping infusions in their
society. Their economy is growing
rapidly despite the disruptions caused
by the Anglo-American bankers in the
last five years. A consultant with
ties to China and Turkey pitched in. He wrote, "The Turks
are an imperial people with a very
long history. The Turkish middle class
is fed up with Erdogan fascism and
being harassed by semi-fundamentalists.
Expect a disruptive event to occur
soon in their country. Turks have
a very strong and deep rooted honor
system. Erdogan made some very bad
mistakes, operating as an arrogant
US puppet. People are fed
up with all his chicanery and deception."

Another solicited comment came from EuroRaj, with deep connections to India and the Turkish region. He wrote, "Logic
dictates the USMilitary abuse of the
Incirlik Air Base in Turkey
used toward narcotics distribution
across Europe
will be confronted and shut down.
Putin surely sees it as a means for
funding and feeding the serpent called
Al Qaeda (aka Al-CIAda). But then
again, geo-polictics is a funny game.
This could be a major casualty of
the current struggle, worth watching."

◄$$$ A CONTRAST IS WORTHWHILE BETWEEN THE UNITED STATES VERSUS CHINA, AND THE UNITED STATES UNDER SOCIALISM.
THE PASSAGE OF TIME REVEALS THE DISINTEGRATION
OF THE UNITED STATES AND ITS DEPENDENCE
UPON SOCIALIST PROGRAMS, NOT WORK
DONE. THE TRENDS DIRECT TOWARD SYSTEMIC
FAILURE. $$$

Back in 1985, the US trade deficit with China was a mere $6 million (m as in mommy) for
the entire year. China
had not awakened from the communist
grip and slumber. By year 2012,
the US trade deficit with China had grown enormously to $315 billion. It
stands as the largest trade deficit
that one nation has had with another
nation in the history of the world,
a remarkable factoid. Conditions
for serfdom are in place. Overall,
the United States has run a trade deficit in excess
of $8 trillion with the rest of the
world since 1975. According to the
Economic Policy Institute, the United
States is losing
half a million jobs to China every single year. The Most Favored Nation
granted status in 1999 marked in the
Jackass view a decision for national
ruin, probably intentional. The US as a nation had served as a beacon for liberty
and capitalism, both of which are
enemies of fascist warlords who reside
in castles and use banks are control
devices.

Back in 1965, only of every 50 Americans was on Medicaid. Today, one of every
six American citizens is on Medicaid.
The trend is on a steep trajectory
toward becoming a lot worse. In 2011,
the elderly father of a dear family
friend had a urinary infection and
kidney failure problem. The cost for
a mere two weeks in the hospital,
with a certain death watch, was over
$30,000, all covered by Medicare.
The projected estimate is that Obamacare
will add 16 million more Americans
to the Medicaid rolls. The estimate
is for Americans on Medicare to grow
from 50.7 million in 2012 to 73.2
million in 2025. The nation is aging
on the demographic side, just like
Japan. The current
count has 56 million Americans collecting
Social Security benefits. By year
2035, that number is projected to
soar to an astounding 91 million.
By year 2025, the count will be in
the neighborhood of 70 to 75 million.
More alarming, the number of Americans
on Social Security Disability exceeds
the entire population of Greece.
The number of Americans on Food Stamps
programs exceeds the entire population
of Spain.
Shockingly, more than one million
public school students in the United States today
are homeless. The US
is facing a systemic failure that
overwhems the social aspects.

◄$$$ A EUROPEAN UNION MEMBER OF PARLIAMENT STATED THAT THE MALI
WAR WAS OVER RESOURCES, NOT TERRORISM
CLAPTRAPP. THE WAR IS OVER GOLD AND
URANIUM. $$$

A Member of Parliament in the European Union has confirmed the creeping perception
that the Mali War is a staged conjured
event, in pursuit of resources. Louis
Laurent from Belgium has come forward to state very clearly
that the media is manipulating the
public to believe the outbreak of
war in Mali is to confront yet more
Islamic terrorists. The same phony
card is played again and again to
dimwitted audiences. The war to take
control over materials, in particular
gold and uranium. The Western bankers
urgently need the gold to cover the
German gold repatriation demand. The
volumes involve and timetable disclosed
fit like a glove to reveal a sick
handshake on a golden table. See the
RT News article (CLICK HERE).

◄$$$ THE ALABAMA DEBACLE IS SET TO COST JPMORGAN A COOL $1.56 BILLION. THE BIGGEST
US-BANK HAS TAIL BETWEEN LEGS, FORGIVING
A DERIVATIVE DEBT OBLIGATION, ATOP
A PAST COURT SETTLEMENT FOR FRAUD.
$$$

A powerful reigning bank king of JPMorgan would never settle with a small client
on a minor case, let alone forgive
debt, if still powerful. JPMorguen
is heading to the zombie pits. The
largest US
bank agreed to forgive $842 million
of debt owed by Jefferson
County in
Alabama, over a contract hedge on the sewer business. The corrupt bank
took the lead in arranging risky securities
deals that pushed the county into
the largest US
municipal bankruptcy. JPMorguen reaped
substantial fees arranging the set
of deals, surely tainted by deep corruption,
which all went bad and turned costly
during the credit crisis. Think bad
press, bad publicity, harm to image.
The debt forgiveness came after a
$722 million settlement in 2009 with
the Securities & Exchange Commission,
also linked to Jefferson County deals. The stage spanned
several years with the largest county
in Alabama, where haggling might be coming to an end.
See the Bloomberg article (CLICK HERE).
JPMorguen has serious problems on
twenty fronts, attacked from all flanks.

◄$$$ DOUBLE AGENT JIM RICKARDS LAYS OUT THE GOLD GAME. THE STRAIN HAS
BEGUN TO SHOW FROM HIS CLEVER DOUBLE
ROLE. $$$

The first interview revealed a confident and effusively knowledgable Jim Rickards.
Much was discussed on the failing
fiat currencies and the Gold rescue
horse. See the Cafe Americain article
(CLICK HERE)
with video interview by Max Keiser.
By the second interview, shown on
YouTube (CLICK HERE),
the strain comes through. The past
role by Rickards is too difficult
to escape. He is not an independent
analyst. He served as the gold advisor
to Long-Term Capital Mgmt, the failed
elite hedge fund run by John Meriwether
which tapped and drained the Bank
of Italy for its gold reserves. Just
a Jackass perspective, but it seems
Rickards despises his old masters

and wants to see them brought down. He might wish for events to unfold in a
manner without any direct role by
him, or without any photo opps where
he is cheering along the way. Rickards
has been a useful instructor in the
past, always to provide some keen
insight. But he always tells important
lies on the USGovt official gold reserves
accounting, when he clearly knows
the truth. He is the old cog permitted
to ply his trade, to sell books, to
conduct interviews, and to appear
brilliant and well-spoken. He is a
double agent. Permit the Jackass to
state that Rickards should step aside
in favor of daytime naps and iced
tea beside the pool, served by unwashed
swarthy who seek to gather gold coins
as savings.

## COLLAPSE ORCHESTRATED

◄$$$ HUSSMAN HAS IDENTIFIED NO BENEFIT TO THE USECONOMY FROM THE FOUR
YEARS OF ACCOMMODATIVE USFED MONETARY
POLICY THAT INCLUDES OVER TWO YEARS
OF DEBT MONETIZATION. THE INDICATORS
ARE ALMOST ALL POINTING DOWN. $$$

John Hussman is a very solid analyst. Apart from being a fund manager, he has
consistently been full of wisdom and
keen perspectives. The USEconomy is
stubbornly hanging on, if the observer
is to believe the overall Gross Domestic
Product data released in twisted form.
If bent toward the Jackass perspective,
the USEconomy is stuck in a powerful
recession of minus 3% to minus 5%
annual growth for five consecutive
years. My preference is to remove
the hedonics, and to correct the price
inflation adjustments that grotesquely
misrepresent inflation realized on
the streets and businesses. Each official
fiscal (USGovt) program or monetary
(USFed) initiative has resulted in
a small bounce in activity, then by
fresh rapid deterioration, followed
by yet another round of fiscal and
monetary reactions of the same non-solutions.
The most aggressive monetary easing
in US history, far from the normal
path and steeped with heretic dangerous
initiatives, has yielded tepid economic
progress even after the exaggerated
positive distortions. In reality,
the aggressive policy has prevented
a full blown collapse, when instead
a nasty persistent deterioration has
occurred in an endless recession that
begs for collapse to put it out of
its own misery.

Observe the Hussman chart, wherein he averages numerous official economic activity
measures produced by the various national
outpost agencies and satellite USFed
offices. A strong downtrend is evident
over the last two years or more. Systems
broke in the bond and housing world
in 2008. They are due to break again,
despite all the best corrupt efforts
to manage and intervene in every single
important financial market. The props
are everywhere, yet they do not engender
growth. They merely enable continuation
like zombie systems. See the Hussman
Funds article (CLICK HERE).

◄$$$ NOTE THE HINDENBURG OMEN AS IT APPLIES TO US-STOCKS. THE SIGNAL DIRECTS
ATTENTION TO NARROW LEADERSHIP. NUMEROUS
DIRE SIGNALS ARE BEING NOTICED ON
THE MANAGED US-STOCK MARKET. $$$

The US stock market is the playground of Plunge Protection
Team wonks, Wall Street manipulators,
algorithm perverts, hedge fund craftsmen,
and more. The scattered data is dizzying
on daily highs & lows, various
oscillators, volume upside versus
volume downside, price-earnings projections,
Fed Value Model based upon prevailing
bond yields, and Dow Theory based
upon S&P index watch with Transporation
confirming and Utilities serving up
background. It is all wondrous science,
except for the corruption that abounds
from offices assigned to the Working
Group for Financial Markets. The stock
market and mutual funds are not permitted
to fall badly, or else the public
might object and demand some actual
policy changes toward healthy substantive
reform. The dispersion and market
internals might warn of problems ahead,
especially the narrow favored sectors.
Welcome to Reich Finance. To the Jackass,
the rocket to new S&P500 highs
does not jibe well with the consistent
economic recession that plagues the
nation. The new stock highs are a
product of the USFed easy monetary
policy, free money, which find distorted
markets as ample prey.

The recent sighting of the Hindenburg Omen bears careful
watch and study. A nasty powerful
stock decline is so overdue that it
is almost forgotten. Recent spectacular
successes to foretell of market declines
were seen in September 1987, in March
2000, and in October 2007.
A weak signal was registered in April
2006, followed only by a brief 7.6%
correction. A possibly false ominous
signal was recorded in December 2010,
after which the market advanced by
9% to its April 2011 high. However,
the weight of the negative indicators
pulled the market down, producing
a nearly 18% correction over the next
10 weeks. Notice the numerous stock
market declines following the registered
Hindenburg Omen signals. The signal
seen in 2011 did not see a major decline
to follow, which means the current
signal might forebode a bigger resulting
decline. Again see the Hussman Funds
article (CLICK HERE).

The market science has seen fit to give a slight modification of the definition
offered first by Peter Eliaides. The
extra criteria are designed to capture
growing internal dispersion of leadership
and breadth, the tell-tale signs for
the syndrome. In other words, dangerously
narrow leadership. Hussman has
produced the following chart, where
the bars indicate points in the past
20 years where the following conditions
were true, called the Hindenburg Omen.

1)NYSE 52-week highs and lows both greater
than 2.5% of total issues traded.

2)New highs in stocks no greater than
twice the number of new lows.

3)S&P 500 greater than its level
of 10-weeks earlier.

4)McClellan Oscillator below zero, which
is another indication of dispersion.
It is defined loosely as the 19-day
moving average minus the 39-day MA,
a smoothing of daily advances minus
declines on the NYSE.

For another similar perspective, see the Financial Sense article by Carl Swenlin
(CLICK HERE)
on market tops. He examines the Percent
Buy Index that focuses on the medium-term
buy signals. It is extraordinarily
high these weeks. Also see the Beyond
Neanderthal article (CLICK HERE).
To be honest, the Jackass has considered
the US stock market a wasteland for over five years.
The market reports and commentaries
go in one ear and out the other, since
it is not a market that seeks proper
value through an equilibrium process.
It is controlled to the hilt, another
chapter of Reich Finance exercised
by nazi bankers. The game is ten times
worse than a rigged casino in Las Vegas. To rely upon USFed easy money to support
valuations that contradict the economic
downtrends seems lunatic. Clearly
the USFed devotes some of its free
money to buy the S&P stock index,
via the USTreasury offices. To chase
the uptrend in stocks seems like a
deadly game of musical chairs. Clearly
the fund managers doing so are braindead
but committed.

Almost all the justifications for stock market investment are vapid vacant vacuous,
like money on the sidelines, foreign
subsidiary cash coming home, the sluggish
promising USEconomic recovery, the
bounce in the housing market, and
my favorite, the low stock price-earnings
ratios based upon optimistic forward
earnings projections that never arrive.
They are all false stories, just like
the Green Shoots nonsense and Exit
Strategy ruse which followed the dopey
Second Half Recoveries offered up
annually. The stock market is designed
for junkies, morons, and fund manager
hacks.

◄$$$ FORMER USFED CHAIRMAN VOLCKER IS NOT IMPRESSED WITH THE SO-CALLED
BENEFITS OF THE CURRENT OVERDONE OVER-STRETCHED
MONETARY POLICY FOR EASING ON RATES
AND CONDUCTING HUGE BOND PURCHASES.
THE GAINS ARE ALMOST NONEXISTENT,
IF NOT IN THE MAIN NEGATIVE. VOLCKER
JOINS THE GROWING CHORUS INSIDE THE
USFED, WHICH WARNS OF NOT JUST DISTORTIONS,
BUT DAMAGE TO THE STRUCTURAL INTEGRITY
TO THE FINANCIAL SYSTEM. VOLCKER SEES
NO EXIT PATH FROM EASY MONEY. $$$

All that remains is for Sir Alan Greenspan to join the chorus of USFed critics.
The Greenspasm himself built the gigantic
unresolvable mess, then left town
after being bestowed knighthood. Without
a horse in the race, Paul Volcker
gave an insightful summary of the
present situation that has grown a
deep dependence upon both free money
and covered debt by inflation machinery.
He spoke at the New York Economic
Club recently, where his critical
assessment echoed the FOMC minutes
released from the May 17th meeting.
The USFed has become a den of crackpot
tinkerers committed irreversibly to
heretical methods that are destroying
the global economy through its financial
structures. Their work guarantees
a new non-USDollar system to emerge
from the other side of the world where
industry is brisk (not scoffed), where
savings accumulate (not debt), and
where the sun does not rise and set
according to the corrupt diabolical
pedofile bankers. Volcker focused
on deep distortions being created
and sustained, if not extended. He
sees few benefits anymore. He advocates
a return to normalcy. He dismisses
the Dual Mandate altogether as already
refuted. He notes that financial firms
have adopted the moral hazard in chasing
yield while embracing risk. He does
not foresee any stable end to policy
accommodation. Volcker said the
following.

"Beneficial
effects of the actual and potential
monetization of public and private
debt, the essence of the QE program,
appear limited and diminishing over
time. The old Pushing on a String
analogy is relevant. The risks of
encouraging speculative distortions
and the inflationary potential of
the current approach plainly deserve
attention. All of this has given rise
to debate within the Federal Reserve
itself. In that debate, I trust sight
is not lost of the merits, both economically
and politically, of an ultimate
return to a more orthodox central
banking approach. [Volcker wants
a return to normalcy!]

It
is fashionable to talk about a Dual
Mandate, that policy should be
directed toward the two objectives
of price stability and full employment.
Fashionable or not, I find that
mandate both operationally confusing
and ultimately illusory. It is
operationally confusing in breeding
incessant debate in the Fed and the
markets about which way should policy
lean month-to-month or quarter-to-quarter
with minute inspection of every passing
statistic. It is illusory in the sense
it implies a trade-off between economic
growth and price stability, a concept
that I thought had long ago been refuted
not just by Nobel prize winners but
by experience. [Volcker regards the
driving USFed objectives to be phony!]

There
is also concern about the possibility
of a breakout of inflation, although
current inflation risk is not considered
unmanageable, and of an unsustainable
bubble in equity and fixed income
markets, given current prices. Net
interest margins are very compressed,
making favorable earnings trends difficult
and encouraging banks to take on more
risk. The Fed's aggressive purchases
of 15-year and 30-year Mortgage Backed
Securities have depressed yields for
the bread & butter investment
in most bank portfolios. Banks seeking
additional yield have had to turn
to investment options with longer
durations, lower liquidity, and/or
higher credit risk. Uncertainty exists
about how markets will reestablish
normal valuations when the Fed withdraws
from the market. It will likely
be difficult to unwind policy accommodation,
and the end of monetary easing may
be painful for consumers and businesses.
[Volcker sees the danger from paltry
carry profit!]"

Hussman offered his comments on Volcker as rejoinder. The massive Quantitative
Easing rounds already have significant
costs, particularly in terms of broad
distortions. With constant talk of
a handoff to a more real economy,
the delusion is stark ugly. The shrill
Wall Street call for a USFed handoff
is a mirage, a delusion, evidence
of a break from reality. Hussman said,
"There is little question
that the dominant view on Wall Street
is that the Fed will sustain QE until
there is some Handoff to the real
economy. But there is no ball to hand
off, and this is becoming increasingly
evident even to the Fed. Though I
do not expect that the Fed will slow
the pace of QE at its June meeting,
it appears likely that the Fed's
statement will shift toward comments
that recognize the diminishing benefits
and increasing costs of further Fed
action." In essence,
the USFed will describe in acute detail
how they are stuck with No Exit Strategy
available, except of course an option
to collapse the USEconomy. Tragically,
that might have been the plan all
along, a Jackass viewpoint since Greenspan
advocated the housing market built
on loose bubbly sand to serve as the
USEconomy pillar, the industry substitute
of a legitimate power pack. It was
the ultimate in heresy, the final
asset bubble for economic dependence.
It was too big to fail, but it failed
in spectacular fashion. Thus the unresolvable
mess that paves the way to a systemic
failure, forecasted by the Jackass
in the last months of 2008.

Hussman made an unusual apology on his shortcoming in 2007 and 2008. He deserves
credit for doing so, rarely seen.
He did not foresee the calamity that
befell the US landscape, both financially and economically.
He did not foresee the depression
concerns as relevant. He expected
a recession with heavy debt writeoffs
and no more, no worse. He anticipated
the USEconomy to emerge unaffected.
Credit to Hussman for his honesty.
These warnings in 2007 and 2008 were
not missed by the Jackass, since they
were cornerstones to the Hat Trick
Letter messages based upon a gradual
systemic failure from mortgage bond
obscenity, from debt saturation, from
banker corruption, from asset bubble
dependence, and from commitment to
endless war. Hussman wrote an especially
damning and comprehensive conclusion
in criticism which should stand the
test of time, and be read years from
today. He wrote the following harsh
criticism.

"I
could not believe that policy makers
would choose to violate the Federal
Reserve Act (particularly Section
13, which has now been rewritten to
ensure it never happens again). I
could not believe that they would
do everything possible to avoid restructuring
bad debt, protecting bank bondholders
while trapping millions of homeowners
in underwater mortgages, changing
accounting rules to obscure balance
sheet transparency, imposing financial
repression to recapitalize banks at
the expense of savers and the elderly
on fixed incomes, and creating a long-term
structural unemployment problem due
to an economic house of cards that
offers perpetual fiscal, monetary,
and regulatory uncertainty. The
bad policy choices were inconceivable.
They still are."

Smart capable analysts are awakening to the national calamity. They have yet
to attach motive to method by the
bank cabal, the crime syndicate of
protected bankers, the security merchants
of narcotics, the propaganda press
network machine, and the outstreched
arms of warped justice. These are
the pillars of the Fascist Business
Model which the Jackass has outlined
and cited with detail for over nine
years. Hussman does not perceive
the fascist element and signature.
Welcome to the national pilferage
and orchestrated destruction, sure
to result in systemic collapse followed
by USGovt debt default. Again see
the Hussman Funds article (CLICK HERE).

◄$$$ BASEL-III IS DESIGNED TO BRING DOWN THE GLOBAL ECONOMY BY CRUSHING
THE BANKING SYSTEM. THE SAME ARCHITECTS
IN THE BASEL SWISS CASTLES WILL ATTEMPT
TO IMPOSE GLOBAL FASCISM, AFTER THE
SYSTEM IS CRASHED, WITH FULL MOTIVE
OF SAME. A GREAT DIVIDE IS SOON TO
BECOME EVIDENT, A WEST WITH DEAD ECONOMIES
UNDER FASCIST RULE, VERSUS AN EAST
UNDER GOLDEN RULE WITH THRIVING FAIR
TRADE AND THE ASSOCIATED LIBERTIES.
$$$

The air of legitimacy is thick with suspicion. The motive to tighten banking
regulations when the entire banking
system is fragile should be viewed
with deep suspicion. A new set
of regulations has been developed
by a powerful central banking organization
will have a dramatic effect on the
global financial system over the next
few years. Most people do not even
know the unique bank exists, but it
actually gives marching orders to
58 major central banks. The new set
of regulations is known as Basel III,
developed by the Bank for Intl Settlements.
It is the central bank clearing house
for central banks, headquartered in
Basel Switzerland.
Much of its gold bullion held as treasury
wealth was stolen from various central
banks during World War II, like in
Czechoslavakia. The Soviet Bloc was
poor, partly due to the nazi banker
raids under the clouds of war. Just
before the 1900 turn, a global Zionist
Conference took place in Basel. No publicity has since been given this secretive bank cabal
since, although conferences continue.
It is a syndicate fortress, often
the cite of gold futures contract
slams, perpetrated with no consequence
to law enforcement toward contract
fraud. The first death threat delivered
to the Jackass in 2006 was originated
from Swiss bankers, in all likelihood
from the Basel
location.

The decisions made in Basel surely have more impact on the global economy
due to credit engines than anything
imposed by parliaments or tax authorit
ies. A brief walk down the lanes
of recent history will reveal how
Basel II and Basel II.5 rules changes played a major role in
precipitating the subprime mortgage
meltdown in 2007. Now a new set
of regulations known as Basel III
is being rolled out, without any popular
representation or concern for life
savings and private wealth. The implementation
of new regulations will begin this
year, to be completely phased in by
year 2019. These new regulations dramatically
increase capital requirements and
significantly restrict the use of
leverage used by individual banks
the world over. While the rules appear
to be loaded with wisdom and good
judgment, they are more assuredly
loaded with plans to collapse the
world economy for securing complete
control of power, no longer hidden.
Only with a wrecked system, the economies
dragged down by the bank structures,
can the castle dwellers impose their
next global fascist plans. If they
have their wish, private citizens
can achieve wealth, even maintain
wealth, only with Basel permission.

The entire global financial system is deeply dependent
upon credit. The new regulations are
going to substantially reduce the
flow of credit from capital requirements
and leverage restrictions. The giant debt bubbles known as the
global economy, a vast Ponzi scheme
since the departure from the Gold
Standard, can only be sustained if
credit continues to expand. By restricting
the flow of credit, these new regulations
threaten to burst the debt bubble
and bring down the entire global economy.
The current global financial system
is not sustainable by any stretch
of the imagination. The current pyramid
debt scheme is destined to collapse.
In my view, and the view of many analysts,
the Basel III rules are designed to
cause the collapse in a controlled
fashion, much more quickly than otherwise
would be the case. The legislated
Bail-In plans to collapse banks and
force the vanishing of private accounts
is timed with the Basel III rules
kicking into phase. In truth, the
Bail-In plans were written by the
BIS commandants in Basel, to assure the vanishing of private wealth,
a key piece to their debt slavery
objectives.

Banks will be required to have higher reserve ratios. They will be permitted
the usage of less leverage, with reduced
dependence upon derivative phony planks.
Banks will be more careful with their
money, on loan approvals, which will
result in credit flowing much more
slowly. Given the fragility of the
current system, any new restrictions
to credit flow threatens to burst
the debt bubble and cause a fresh
global crisis. That is their plan,
part two to the Lehman episode. These
new regulations will be phased in
between 2013 and 2019. Expect many
more bank failures, in full contradiction
to the formal sham stress tests conducted.
My personal Jackass belief is that
the Swiss bankers have been counter-party
to the one-sided futures contract
short positions. My Jackass belief
is that the Swiss bankers have seized
most of the Allocated Gold Accounts.
My Jackass belief is that the Swiss
bankers have plans to control governments
and banking systems in the open very
soon, no more deep secrecy, thus imposing
a harsh draconian debt slave system.

The Eastern nations are not subject to the Basel
dictators in the castle enclaves. They are not accountable to anyone. The over-arching dark Basel
cabal is the ultimate in imperial
overlords, often steeped in satanic
mist. Ironically, the hope of the
West is for the Russian & Chinese
leaders to hasten their projects to
set into place a fair equitable broad
extensive global trade settlement
system based upon Gold that renders
the Western banks as empty rooms with
toxic paper and gutless old men in
rickety thrones. The Eastern communist
roots are largely gone, seeking capitalism.
The Western nations have fully embraced
fascism. Let the Western banks transform
into lending utilities offices, with
as much power as the electrical generation
facilities. See the excellent Economic
Collapse article (CLICK HERE).
For a corroborating testimony from
a financial insider, see the Before
Its News article (CLICK HERE).
He offers information on how the movement
is toward the final stages of a full
scale collapse.

May the Basel castle lords burn in hell, where they direct most of their attention
for rituals and sacrifices. Let it
be known that four powerful groups
are in competition for global power:
bankers of a certain ethnic type,
satanic bankers, narcotics barons,
and the ancient Chinese families that
have awakened after communist slumber.
Unless the Eastern Alliance led by
Russia & China, with key roles
played by India, Turkey, and Iran,
come to provide a global leadership
on trade settlement that eclipses
the Western banking system, the world
will enter a dark fascist era. A very
drak fascist global era! The collapse
desired in my view by Basel is an essential step for creating the European-centric police
state that offers zero liberties.
The co-existence with a flourishing
equitable system emerging from the
East centered on Gold trade seems
unlikely. My Jackass expectation is
for a great divide, much like the
Iron Curtain between the Capitalist
Free West versus the Communist Captive
East prevailed from 1950 to 1990.
The new Golden World Wall is likely
to emerge that divides East and West.

The swing nations are Germany and Turkey. These two key nations are beginning to
depart from the cocoon of banker loyalty
to the Anglo-Americans. The Germans
must hasten their open support for
the Eurasian Trade Zone, the Gold
Trade Standard, and the great barter
system. Some movements are in progress
within Germany,
all kept rather hidden for their own
security. As they say on the battlefield,
no need to rush out of the trenches
too early. The Turks must hasten
their role as gold intermediary bankers,
which will force a sunset of sorts
on the great London City bank function.
The United
States, United
Kingdom, Switzerland,
and a tiny Mideast ally on the SouthEast
Mediterranean form the Axis of Fascism.
On the other end, Russia,
China,
and an emerging set of nations are
in the process of forming the Alliance
of Gold Trade and freedom from monetary
hegemony. While Europe will be the
prize, the United
States will be
isolated like in the 19th century.
The American watch words to come into
vogue will be price inflation, supply
shortages, vanished wealth, debt slavery,
and civil disorder as the castle lords
attempt to impose fascism.

## DISORDER PREVAILS

◄$$$ MASSIVE ECONOMIC PROBLEMS ARE ERUPTING EVERYWHERE. THE SIGNALS ARE
DIVERSE AND DEEP. SOMETHING UGLY THIS
WAY COMES. $$$

Signals include economic depression across Southern Europe, economic recession
in Central Europe, stiff slowndown
in China, chronic depression called
slow growth in the United Fascist
States, recession in Australia, reduced
industrial output in every nation,
youth unemployment in the entire West,
persistent outflow of deposits from
Western banks, global cash flow in
decline for multi-national companies,
Japan spinning out of control, high
margin debt in the US stock market,
smart money leaving stocks altogether,
and narrow market breadth giving off
the Hindenburg Omen. Something ugly
this way comes, sure to be exploited
by Wall Street firms. See the Zero
Hedge article (CLICK HERE).

◄$$$ FOR THOSE NOVICES TO CRIME AND FRAUD, AN EDUCATION IS IN ORDER, WAY
OVERDUE. ALMOST ALL FINANCIAL MARKETS
ARE RIGGED, THE PROOF HAVING FLOWED
IN HEAVY NEWS VOLUME IN THE LAST TWELVE
MONTHS. LAWSUITS ARE STACKING UP,
HAVING BEGUN OVER TWO YEARS AGO. BIG
BANK INTEGRITY IS LONG GONE. THE SECURITY
AGENCIES HAVE JOINED THE FRACAS, FINALLY
REVEALED AS BIG BROTHER. THE AMERICAN
FABRIC OF INTEGRITY IS RIPPED TORN
SHREDDED. $$$

The casual observer requires a summary of known market manipulation scandals
in a memory refreshment. To be sure,
they are difficult to keep track of,
since they involve almost every known
financial market, with new fresh scandals
almost every month. Law enforcement
is nowhere, since the justice ministries
are too busy covering up the massive
frauds. Fortunately the incredibly
astute capable and intrepid Tyler
Durden of Zero Hedge provides the
handy scorebook to keep track.

LIBOR on interest rates (CLICK HERE from a year ago). Barclays
in London is the big ringleader in the criminal rate fixing. They
have been busy for the last year
defending in court cases, since
the adjustable rate mortgage world
has logged countless lawsuits. Sadly
for Barclays, they left an obscenely
long trail of evidence in multi-way
communications like emails.

ISDAfix on swaps (CLICK HERE
from two months ago). Banks are
leaving the panel that sets ISDAFix,
the benchmark for the $379 trillion
swaps market, as regulators probe
suspected manipulation of the rate.

Platts on oil prices (CLICK HERE
from eight months ago). A Swiss
trading office of Total Oil Trading
set off a firestorm when they submitted
a letter to an international commission
with evidence offered on price fixing
in the energy market that pertains
to oil, gas, coal, power, and more.

WM/Reuters on FX currencies (CLICK HERE
from this June). The loosely regulated
$4.7 trillion FOREX market is the
largest among all financial markets.
The WM/Reuters exchange rates have
been front-run by employees, as
well as having trades pushed through
before and during 60-second windows
when the benchmarks are set, with
dealer collusion.

High-Frequency Trading on stocks (CLICK HERE
from this June). The flash trading
can be observed in action on June
11th, with highly detailed NANEX
bids and asks guiding the after-hours
stock market with relative ease,
and full exposure by their algorithms.

Then not to forget, the USFed and major central banks
like the Bank of England,
the Euro Central Bank, and the Bank
of Japan are engaged in a comprehensive and unprecedented
USTreasury curve modeling exercise.
It is done under the guise of both
ZIRP (short-end) and QE (long-end),
with flying buttress aid done by the
heavy lifting Interest Rate Swap derivative
contracts. The US
stock market is a certain beneficiary,
courtesy of $12 trillion in extra
liquidity in the past five years.
To hell with value investing. The
Fed Valuation Model dictates that
with rates so low, the major stock
indexes should be valued near infinity.
Pass the Bollinger bottle, and have
some unwashed native serve it up.
To claim that the Gold & Silver
markets are the only markets not manipulated
is pure bold folly, worthy of thorazine
treatment. See the Zero Hedge article
(CLICK HERE).
Couple the above evidence with the
IRS target scandal, the press spying
scandal, and the NSA eavesdropping
scandal, and conclude that the infrastructure
of the present financial, legal, and
societal structure is falling apart
one brick at a time. Be safe to believe
the last phase is in progress. Welcome
to Reich Finance, a bizarre combination
of crime-ridden financial markets,
culpable finance ministries, press
propaganda mills, and justice departments
attacking those who attempt to expose
the frauds. At least the whistle blowers
are not painted at child pornography
perps like in 2004 and 2005.

◄$$$ GENSLER HAS BEEN FIRED AT C.F.T.C. FOR UNWANTED REGULATORY PRESSURE
WIELDED AGAINST WALL STREET BANKS. THEY WISH FOR TOTAL FREEDOM IN CRIMINAL FRAUD RELATED
TO DERIVATIVES THAT CROSS GLOBAL BOUNDARIES.
HE WILL BE REPLACED BY A NOBODY WITH
NO EXPERIENCE, INSIGHT, ABILITY, OR
TEETH. THE BIG-US
BANKS WANT NO REGULATORY PURVIEW.
BUT THEY MIGHT HAVE FALLEN INTO A
DEADLY TRAP BY INTERPOL FORCES. $$$

With little fanfare and no detectable pressure, President Obama quietly fired
Gary Gensler as chairman of the Commodity
Futures Trading Commission. A big
story brews behind the scenes, one
of basic domestic pressure, the other
of global intrigue. The wormy Gensler,
a certain agent of Goldman Sachs pedigree,has served the syndicate well
in permitting Gold & Silver market
fraud by the big US banks. But Gensler has turned troublesome
by crossing Wall Street. He had been
too aggressive in pressuring the big
US banks, accusing them of extensive
antics, the usual fare of derivative
abuses and market rigging, which have
seeped to the surface in recent months.
Foreign nations have objected vigorously
in the last few years, especially
since the fall of Lehman. The focus
of attention has been the OTC swaps
and derivatives activity conducted
offshore, out of view to most observers.
Some dim misguided souls believe the
Gensler dismissal is prelude ot a
major breaking scandal on the precious
metals exchanges. Most likely not
so. It is all about the Wall Street
banks preferring to have nobody at
the CFTC front office in oversight.
By nobody is meant a greenhorn rookie
who could not see an oncoming truck
approach a pack of old ladies crossing
the street in South
Manhattan.

The replacement referee is reported to be Amanda Renteria, the former chief
of staff to the very marginal Senate
Agriculture Committee. She attended
Harvard
Business
School, and
spent most of her career in public
service. Yet another Obama appointee
with no business experience, his custom.
She was briefly under the Goldman
Sachs roof, not long enough to win
pedigree. Clownish observers talk
of her potentially turning out to
be a highly effective regulator despite
her lack of practical experience in
financial regulation. Earth to public:
Miracles do not occur on Wall Street.
The Obama Admin truly has an abysmal
track record in financial reform.
No change is detectable. Expect the
same result at the replacement referees
in the National Football League in
2012. Missed calls and numerous blunders.

The ouster of Gensler is a gain for big bankers who advocate lax oversight.
The Wall Street banks will do what
they want in foreign offices with
no oversight. But they might do well
to watch over their shoulders. The
churning of derivatives, which the
banking system depends heavily upon,
demand no oversight be done, not more.
Gensler's removal comes in the
midst of controversy over a proposed
CFTC rule, strongly supported by Gensler,
that would extend US
regulation to swaps contracts involving
foreign firms founded or doing business
in the United
States. Wall
Street firms are expert at using offshore
subsidiary firms, some of them dummy
shells. The swaps operate as a kind
of derivative exchange unto itself.
The regulatory enforcement would have
subjected foreign banks and hedge
funds to the same regulations as US
firms, when trading in swaps with
US parties. The big US banks also
have a tendency to hide (operate)
in European financial firms to wreck
the system, to exploit their advantage,
to carve out profits, and to sabotage
national integrity. See the Cafe Americain
article (CLICK HERE).

Catherine Austin Fitts pitched in. She said, "The banks want to be free
to do whatever they wish to do and
have to do with derivatives. Obama
needs an engineered attack [a phony
reform action taken] on his Administration
to turn down the volume. Obama needs
the bond market to keep financing
the Administration. That is easier
to do with nobody at home. One thing
for sure. The overt and covert side
of the house are squabbling over reengineering
and financing sovereign budgets. The
push to attack the tax havens is increasing
the pressure."

The Voice offered a much more intriguing interpretation. He sees the Gensler
removal and the free rein in derivative
usage as a trap that the Wall Street
banks accepted. They took the bait.
Next comes the clamps from the
trap, the damage, cutting their legs
off at the knees. He implied that
the US bankers made a serious error and will be ensnared
in a giant trap from their own extended
derivative abuses. As in game over,
with some important events to unfold.
No additional details are known on
exactly which party stands to gain
from the trap catching its Anglo banker
prey, or where the party stands, or
how the trap will close. It will be
revealed over time, like the London
Whale being exposed and beached with
heavy JPMorguen losses.

◄$$$ NOT ONLY IS THE SOVEREIGN BOND MARKET WEAK AND VULNERABLE, BUT SOME
MAJOR BANKS ARE ON THE VERGE OF SUDDEN
COLLAPSE. THIS IS A NEW DEVELOPMENT,
AN EXTENSION OF THE DEMANDS FOR ALLOCATED
GOLD ACCOUNT TO BE REDEEMED. THE WEALTHY
ARE PULLING OUT BILLION$ IN CASH AND
GOLD FROM BIG BANKS. THEY ARE TEETERING.
$$$

Efforts to make the global financial system safer through tighter bank regulations
could be making them more vulnerable
to credit market shocks. On a widespread
basis, bond traders are concerned
that a sharp USTreasury Bond selloff
since late May could turn into a rout.
From Japan
to Singapore, the Asian bond
markets with their lesser liquidity
are at great risk of selloffs, where
investors seek redemptions. The region's
debt-to-GDP ratio rose to 155% in
mid-2012 from 133% in 2008, according
to the McKinsey Global Institute.
The ratio is currently higher than
during the Asian Meltdown that occurred
in 1997, when several economies in
Asia folded as
capital fled the region. The market
for selling the new so-called G3 Bonds
is drying up, bonds issued by Asian
borrowers but denominated in USDollars,
JapYen, and Euros. Witness a collapse
at the periphery of the Western banking
system. See the Reuters article (CLICK
HERE).

The Voice pitched in with a perspective on vulnerable banks generally across
Central Europe.
He wrote, "Spot on with regard
to vulnerability. It is more fragile
than most people realize. I received
last week very disturbing news in
regards to a couple of big banks going
bust. The pressure is due to people
demanding their physical metal to
be handed to them, while at the same
people pulling their funds out of
those banks. We are talking about
$billions from very wealthy influential
angry depositors. Furthermore,
there is the witch hunt to clamp down
on tax havens. So rich people are
pulling money out for fear of their
Gold bullion being improperly used,
and other rich people are moving their
funds out of havens. Several banks
are left vulnerable, if not hollowed
out. A great many people holding a
lot of cash are currently finding
out that they have no power."
The Jackass believes he is referring
to Swiss bullion banks.

◄$$$ UPSIDE DOWN HYPER-INFLATION HAS BEGUN TO SHOW ITSELF. WHILE THE BANKERS
STRUGGLE TO ASSURE THAT INFLATION
DOES NOT ENTER THE MAINSTREAM, THEY
CANNOT HALT THE PROCESS OF REVERSE
INFLATION. THE VANISHING OF WEALTH
COMES FROM ITS NATURE OF BEING DEBT
IN DISGUISE. THE SYSTEM IS EXPERIENCING
A WEALTH WRITEDOWN FROM A FAULTY FOUNDATION
FOR MONEY ITSELF. WITNESS THE HYPER-DEFLATION
EFFECT. THE ASSET VALUE DECLINES OCCUR
IN LOCKSTEP WITH THE RISE IN MONEY
SUPPLY. NO ESCAPE FROM INFLATION,
ONLY A DIFFERENT FORM. $$$

If prices cannot be permitted to rise, then wealth must
be forced to decline. The Jackass
calls it the Law of Finite Wealth.
The decline will happen sharply, in
order to compensate for prolonged
monetary illness. The exercise is
simple from a basic enlightened perspective.
Flip over the assets and wealth forms.
As they are revalued downward (like
in debt writedown), or as they are
confiscated (as in bank bail-ins),
one can then see the hyper-inflation
at work. Except it arrives in reverse.
For several years, the bankers and
politician under puppet control have
refused to permit rising prices on
Main Street and the business sector. To be sure, costs have risen and
assorted materials have risen in price.
But wages and end products have not
in any general sense. Mother Economic
Nature is brutal and unforgiving.
The end result has been not higher
prices in huge jumps, but rather much
lower wealth in huge quantum declines.
Think home equity. Think mortgage
bonds. Think pension funds. Even at
times, think money market funds.

The bizarre upside-down hyper-inflations have begun to strike hard. Asset devaluations
and account confiscations (even thefts)
have become commonplace. It is not
just the 40% haircut on Cyprus bank
accounts or MF-Global 60% account
seizures or the 40% mortgage bond
losses on the family Trust Fund or
complete loss on home equity that
largely vanished. It is instead the
collective wealth of entire nations.
Next consider the corrosive effect
of price inflation that actually does
reach the street. That $200k fund
from the successful business venture,
or the $2 million nest egg for retirement,
which was left alone in year 2000,
is now worth 50% less in purchase
power, perhaps 70%. Refer to a folder
filled with US bank certificates of deposit,
losing value from the steady scourge
of price inflation. The subtle erosion
is hidden, but in the same sense upside-down
nasty inflation.

The loss of wealth corresponds to the same addition to
the national money supply, all in
proportion. The USFed has overseen a vast expansion
in the monetary aggregate, which sounds
more sophisticated and less heretical,
far more impressive to be sure. The
central bank has taken great steps
to keep the infusions within the banking
sector, but impacts have hit certain
asset types. The hidden loss of
wealth matches the inflation in money
supply expansion, step for step.
What is different is the asset base
has shrunk. What has not changed is
the reduced purchase power of the
assets held. Flipping things upside
down helps to understand the hyper-inflation
and its nasty effects. See the YouTube
video (CLICK HERE).

Chronic double digit price inflation has the same end result as confiscation
and asset revaluation. They are simply
given different labels, or seen as
different procedures. As footnote,
a colleague pointed out that Antal
Fekete called the above phenomenon
Hyper-Deflation, while the Jackass
Jim Willie has called it Disintegration.
The recognition of kissing cousins
to hyper inflation is happening to
purchase power. People must be careful,
as money confiscation is fast becoming
legal, and the norm, written in law
by bankers and their proxies. Money
should be taken out of banks and kept
out. Money should be converted into
Gold & Silver, which is real money.
When in precious metal form, it will
rise in value with the corresponding
increase in money supply, the great
currency debasement.

◄$$$ OUR SYSTEM IS SO FLAWED THAT FRAUD IS GUARANTEED. AN IMPENDING FINANCIAL
COLLAPSE IS ASSURED, SINCE NO SOLUTION
IS SOUGHT, AND BANK REGULATIONS ARE
TO BE TIGHTENED. FRAUD IS ENCOURAGED
AND PROTECTED, AN INTEGRAL PART OF
THE SYNDICATE BUSINESS PLAN. THE RECENT
TUMULTUOUS EVENTS ARE A PRELUDE TO
THE COLLAPSE IN A GRAND FINALE. $$$

Bill Black discussed the element of fraud laced within the system. Although
he does not directly cite the Fascist
Business Model, a regular theme in
the Hat Trick Letter for over nine
years, it is implied and deadly in
his essay. Fraud is not just tolerated
in the US and West, but rather encouraged
and protected. See the Before Its
News article (CLICK HERE).
A more detailed prospective account
of the unfolding disaster is given.
It attempts to describe a wrecking
ball sequence that will engulf the
world, the effects to be felt by individuals,
families, and businesses. See the
From the Trenches World Report article
(CLICK HERE).

## BIG BANK DEATH WATCH

◄$$$ THREE BIG WESTERN BANKS ARE ON DEATH WATCH, STARTING WITIH DEUTSCHE
BANK. THEIR CRIME IS F.O.R.E.X. CONTRACT
FRAUD. THESE THREE BANKS DOMINATE
IN THE CURRENCY MARKET. ANY FAILURE
WOULD ROCK THE FINANCIAL WORLD. SINGAPORE
CENSURED 20 BANKS FOR RIGGING BENCHMARK
RATES (LIKE LIBOR). $$$

With a tone of urgency in a new development, the Voice shared some information
on three big banks that are ripe for
failure. They are Citigroup, Barclays,
and Deutsche Bank, which cover New York, London, and Germany. Two
weeks ago, he first mentioned them
but not by name, stressing the imminent
shoe to drop on the next bank failures
like Lehman Brothers. After a certain
degree of Jackass begging, accompanied
by some harmonized begging by colleagues,
he relented. He wrote, "Deutsche
Bank, Citigroup, and Barclays are
under the gun bigtime for massive,
multi-$billion FOREX manipulations.
Investigations at the highest level
are well along, which no politician
or judge can interrupt. As usual the
location of the crime scene is London.
Deutsche Bank will not survive their
current legal problems, despite cooperation
with the Interpol Fraud Division."Add
to the list a couple weakened Japanese
banks, but for different causes.

While hundreds of firms participate in the FOREX currency market, four banks
dominate. Their combined share is
over 50%, according to a May survey
by Euromoney Institutional Investor.
Deutsche Bank (based in Frankfurt)
is #1 with a 15.2% share, followed
by Citigroup (based in New
York) with 14.9%, then Barclays (based
in London) with
10.2%, and UBS (based in Zurich) with 10.1%. If any one of these banks enters
failure with a grand bust, the financial
foundation will be rocked far more
than during the Lehman bust. The event
will be much more global in impact.

Pressures on the big banks will not end. The Singapore Monetary Authority censured
banks for trying to rig benchmark
interest rates. The banks were ordered
to set aside $9.6 billion at zero
interest. Internal controls will be
reviewed in formal steps. ING Groep
NV, Royal Bank of Scotland,
and UBS were among twenty banks censured,
where 133 traders were cited for manipulation
of the Singapore Interbank Offered
Rate. More LIBOR extended fraud, seen
globally. The decision came after
review of the period from 2007 to
2011. See the Bloomberg article (CLICK
HERE).

◄$$$ DEUTSCHE BANK IS HORRIBLY LACKING IN CAPITAL, IN OTHER WORDS FAR
PAST INSOLVENT. IT IS IN THE PROCESS
OF GOING BUST. IT CANNOT SURVIVE THE
SCRUTINY OF RECENT DERIVATIVE ACCOUNTING.
ITS FAILURE WILL BE A SIGNIFICANT
TURNING POINT FOR THE NATION. $$$

In Germany, the flagship Deutsche Bank is in big
trouble, extending from its role in
LIBOR and corrupt FOREX swap contracts.
An insider revealed that the once
venerable D-Bank is in great danger
of entering failure. Its long harlot
role in service to London banker dons is coming to a disgusting end. The Jackass expects
that once D-Bank goes bust, Germany will turn on a dime to greet its Eastern
trade partners Russia
& China to join the Eurasian
Trade Zone. It will be a seminal
event, a critical geopolitical turning
point. There are two Germanys, 1)
the hacks aligned with Merkel and
the European Union who have squandered
a decade of national savings (estimated
at US$3.5 trillion) on welfare for
inefficient reckless neighbors to
the South, and 2) the intrepid new
commercial titans who have forged
significant commercial and supply
deals with Russia to be more fully
revealed and soon exploited.

Tom Hoenig has an interesting past job record. As former Kansas City Fed Governor
and constant FOMC dissenter gadfly,
he was at times the sole voice of
reason at the US Federal Reserve.
He currently serves as FDIC Vice Chairman.
In a recent Reuters interview, Hoenig
admitted that Deutsche Bank is very
seriously under-capitalized as a bank.
Translate to mean they are grossly
insolvent and at risk of failure with
any push. While he said the flagship
German bank had no margin for error,
a more accurate statement would be
they are dead meat to be served up
soon as a giant bank failure. A grand
global disruption is very near, far
more widespread in impact than the
Lehman Brothers bust. A year ago,
Tyler Durden highlighted the plight
of Deutsche Bank following the sham
stress tests. D-Bank was not even
listed, a hint of its pathetic status.
At the time, its true capital ratio
was under 2%, with an implied leverage
of 60 times. See the Zero Hedge article
(CLICK HERE).

◄$$$ THE BRITISH COURT RULING ON JUNE 19TH COULD BE A POTENTIAL SIGNAL OF TREMENDOUS
CHANGES COMING TO THE WESTERN BANKING
SYSTEM. THE END OF IRAN
SANCTIONS IS OCCURRING. EXPECT SOME
MAJOR CHANGES THAT INDICATE A SHIFT
IN THE GEOPOLITICAL WINDS. THE EAST
IS MAKING ITS VOICE HEARD. $$$

The Supreme Court in Great Britain has overturned a ruling against Bank
Mellat of Iran
over its alleged links to Tehran's
nuclear energy program. Witness the end of the Iran sanctions led
by the USGovt, in which the Americans
shot themselves in the face, legs,
and gonads. The court ruled that the
UKGovt acted improperly when it imposed
sanctions on the Iranian bank in 2009.
It formally called the directive irrational
and disproportionate, even unlawful.
The decision came after the European
Union General Court decided in January
to quash sanctions imposed against
Bank Mellat in July 2010. The Iranian
Bank has promised to explore legal
channels and file lawsuit against
individual governments for the damages
it has suffered as a result of sanctions.
A claim was mentioned in excess of
GBP 500 million, roughly US$750 million.
At the beginning of 2012, the US and the EU imposed
sanctions against Iranian banks and
energy firms. The goal was to prevent
other countries from purchasing Iranian
oil and conducting transactions with
the Central Bank of Iran. The sanctions entered into force in the
summer of 2012. They have been an
unmitigated disaster, as they encouraged
development of a non-USDollar global
alternative. The real sin was in Iran's
usage of non-USD settlement for energy
trade. See the PressTV article (CLICK
HERE).
Great shifts in global winds are coming,
this only the beginning.

##
CENTRAL BANKERS WITHOUT OPTIONS

◄$$$ USFED CANNOT TAKE OFF THE BOND MONETIZATION. THEY HAVE NO EXIT STRATEGY.
THEY ARE DEEPLY COMMITTED NOT ONLY
TO KEEPING THE ZERO BOUND RATE AND
MONETIZED BOND PURCHASE, BUT ALSO
TO EXPAND THEIR ALREADY WRECKED BALANCE
SHEET. THE ENTIRE FINANCIAL SYSTEM
AND USECONOMY HAS GROWN TOTALLY DEPENDENT
UPON THE USFED HYPER MONETARY INFLATION.
NO MARKETS ARE SPARED, ALL RUINED.
FREE MONEY IS USED TO PROP THE IMPORTANT
BAROMETERS AND TO RIG THE SUPPLY MECHANISMS.
$$$

The live stress tests are compelling. The mere thought (whiff) of reduced USFed
pressures on accommodative monetary
policy sends shock waves through financial
markets and shivers through investor
hearts. Not just in the United
States, but across
the entire world, Asia
included. The speeches offered
by the USFed Chairman Bernanke do
not reassure. His words recently have
given great emphasis to the prospect
of accommodation being reduced, underscoring
the substantial risks of ending stimulus.
The problem, as recognized by a growing
list of critics, is that the ZIRP
& QE are not stimulus at all.
They distort the asset prices and
lift the cost structure, both of which
wreck the USEconomy, as well as the
global economy. Thus the Eastern Alliance
has responded with heightened motive
to replace the USDollar in trade settlement,
which would render the USTBond as
a banking system relic to be discarded,
an item for the toxic Third
World trash receptacle.

The end of the USFed monetary easing policy requires a new buyer for over $1
trillion in USTBonds each year, plus
more to cover rollover refundings.
No buyer is apparent, thus no end
to the easy policy. To attract buyers
of USGovt debt securities, the interest
rate would have to be at the level
of Spain
or Italy,
possibly the level of Greece.
A normal interest rate would be so
high as to bring about a huge rise
in borrowing costs, resulting in even
grander deficits. The USFed has no
Exit Strategy, has no exit doorway
at all even to consider. No party
would buy the USTBonds and the required
interest rate would be exorbitant.

Ben Bernanke testified recently before the USCongress (a den of compromised
Wall Street bagmen) and spoke about
the tapering of QE. This is the new
watch word, Tapered QE. The Bernanke
Fed has no credibility left. Some
trial balloons over the last few weeks
regarding cutting back on QE have
been floated. The results are not
promising or encouraging. Rates are
rising. The stock markets could be
the first victim, unless the USFed
and USDept Treasury work overtime
to amplify their already substantial
stock support machinery. The other
victim is already the Japanese stock
market. On a recent day, the Nikkei
stock index suffered a massive 7%
decline after opening up 3%, for a
magnificent reversal that painted
a billboard of hazard and risk. Stock
markets all over the globe are down
over 2%, except the the better controlled
US market. But the S&P500 stock
index is clearly next. Many are the
dislocations that will take place
strictly on the prospect of lesser
Quantitative Easing.

People should be aware that QE is code for outright monetization,
a euphemism for hyper monetary inflation
of the most virulent dangerous variety. It means printing money to purchase USTreasury Bonds that have no buyers. It
means permission given to the USGovt
to continue its reckless ways domestically
with social programs and bank welfare.
It means permission given to the USGovt
war machine patrons to continue the
endless predatory wars, complete with
massive fraud and skimming. Be sure
to know that unaccounted for newly
printed money is used to purchase
the very instruments that paint the
tape on billboards that offer the
ALL IS WELL message, much like altering
the thermostats and barometers. Be
sure to know that unaccounted for
newly printed money is used to finance
complex contract chicanery that suppresses
prices for all the things the USEconomy
requires. Remove them and the public
alarm signals red flags. Remove them
and price inflation zooms higher to
trigger public disorder. Pure and
unadulterated printing is used to
paint the pretty (false) pictures
so the populace will continue to sleep
in oblivion, said a harsh critic.
See the Yahoo Finance article (CLICK
HERE).

◄$$$ THE SHADOW BANKING SYSTEM MUST CONTINUE, OR ELSE ALL GOES DARK IMMEDIATELY.
THE USFED IS TRAPPED IN ITS OWN MACHINERY.
A PONZI SCHEME IS BEING REVEALED THAT
ENCOMPASSES THE ENTIRE USECONOMY AND
ITS FINANCIAL STRUCTURE. THE SYSTEM
COLLATERAL IS INADEQUATE. THE ACCOUNTING
IS FALSIFIED. THE COMPLIANCE PROCESS
IS GIMMICKED. THE INTERLACED COUNTER-PARTY
RISK IS GLOBAL. THE REGULATIONS ARE
WRITTEN BY THE BANKERS. BANK FAILURES
ARE FORBIDDEN, AS FUNDS ARE PROVIDED
FROM THE BOTTOMLESS CENTRAL BANK WELLSPRING.
THE MORAL HAZARD IS EMBRACED THROUGHOUT.
THE SYSTEM IS GUARANTEED TO COLLAPSE.
$$$

A brilliant concise narrative has been provided by Bill Frezza from the Menckenism
blog. The fractional reserve banking
system relies upon the grand sprinkler
device to disseminate money, but also
to fabricate money from thin air via
credit extension. Loans are created
through pyramid systems of new money
creation. Banks in recent years have
not feared the risk of failure. They
dreaded the thought of not participating
in the next Ponzi chapter (see housing
& mortgage bubbles). Dodgy borrowers
tended to be protected and concealed,
not avoided and shown the door. If
depositors were more aware and less
numb in the cerebral cortex, the landscape
and news networks would be dominated
by bank runs from removal of funds
from corrupted casinos and toxic sprinklers.

The risk & reward model has been co-opted and replaced with the Fascist
Business Model. The moral hazard
is systemic and deeply entrenched;
evidence abounds. Reliable depositors
and creditworthy borrowers resulted
in strong banks and a stable financial
foundation. That is gone. Ultra-low
rates today stand in effect side by
side with insolvent dead banks, following
an era of indirect USGovt funding
and corrupt regulatory oversight.
Periodic bank failures used to remind
depositors of the connection between
risk and reward, in reality checks.
They have been forbidden, as the big
corrupt US
banks are deemed too big to fail,
when instead they are the syndicate
power centers of control. The officially
provided deposit insurance and other
financed backstops have shielded most
depositors from the risk of loss.
Bank premiums toward insurance are
inadequate. Conservative bankers who
want to remain in business must take
on more risk. Banks learn that competitive
advantage can be obtained by either
gaming the regulations or having stooges
write them. Banks have been permitted
via altered FASB accounting rules
to mark their own balance sheets.
The moral hazard is systemic and
deeply entrenched; evidence abounds.

The financial firms in general are chasing yield in risky minefields, as they
pursue the best among least bad options.
The competitive advantage for banks
is no longer from prudent management,
but rather from federal connections
through the Wall Street marbled offices
in Manhattan.
The plethora of government bailouts
allowed an underlying shadow banking
system not only to survive but to
flourish and to grow much larger.
Like most large tall structures with
poor foundation lacking integrity,
the system will falter, fail, and
fall.

The big US banks have amassed almost $2 trillion in excess
reserves which they store at the USFed,
upon which the central bank relies
in order to appear solvent. The central bank controller is more
insolvent than its subjects. The profit
from the shadow banking system is
not used to make commercial loans.
Rather, they use the money to fund
proprietary trading operations in
repos and derivatives. Securities
held as collateral by counter-parties
in a repo contract can be rehypothecated
by the lender to obtain additional
loans. Such was the unfortunate discovery
by MF-Global hapless clients, who
saw their assets dispatched to London. In other words, the big financial firms
are using private accounts as collateral
to fund their giant reckless games,
in repeated fashion. Assets are
used as collateral multiple times,
since the insolvency is pervasive
and viable assets are scarce.
The result is a bewildering array
of complex synthetic derivatives,
otherwise known as a circular check
kiting scheme. Add in the issuance
of commercial paper required to grease
the wheels. The biggest difference
is that an embezzler kiting checks
does not have the support of a central
bank providing steady injections of
liquidity, beefing up balance sheets,
and covering the corrupted tracks.
The big banks also provide themselves
an important backstop with narco money
laundering, a practice so deep that
gold bars sit side by side with packaged
heroin bricks on bank shelves in overnight
operations.

The top 25 US banks have piled up over
$200 trillion in leveraged bets atop
a gradually reduced wedge of collateral.
The claims are spread across an opaque
and complex chain of counter-parties
residing in multiple legal jurisdictions.
Hence the systemic risk is global.
These collateral claims are interlaced
with hundreds of $billions in notional
outstanding derivatives made by other
banks around the world, altogether
amounting to over 20 times global
GDP. The estimates on the total global
derivatives at work range between
$400 trillion to $1.3 quadrillion.
The global banking system has a
vaporous foundation that invites scattered
important bank failures. A mockery
is made of Value at Risk accounting,
as the systemic risk threatens to
bring down the global banking system.

Private citizen and taxpayer risk exposure to the banking system has been seen
in account confiscations, thoroughly
forewarned to the American public.
The people have ignored the warnings.
No bank runs have yet occurred. The
Ponzi Scheme will go bust, and the
bubbles will pop, someday in the near
future. The lack of adequate collateral
guarantees the day. Frezza concluded,
"A donnybrook is going to
break out over that thin wedge of
collateral, whose ownership is spread
across counter-parties around the
world, each looking for relief from
their own judges, politicians, bureaucrats,
and taxpayers. When that happens and
the clamor for regulation, nationalization,
confiscation, and demonization arises,
there is only one thing we can be
sure of. The disaster will once again
be blamed on a free market capitalism
that has not existed in this country
for over 100 years." Welcome
fascism, the door opened and entered,
the celebration on 911. See the guest
article by Bill Frezza via Menckenism
blog on Zero Hedge (CLICK HERE).

◄$$$ THE BANK OF JAPAN IS HEAPING GREAT DESTRUCTION
FROM ITS BADLY RUN EXPERIMENT. THE
NATION OF JAPAN COULD BE THE
FIRST FAILED FINANCIAL STATE IN THE
WEST, ALWAYS THE ADJUNCT LACKEY FROM
THE UNITED STATES. THE COMBINATION
OF FISCAL (GOVT) AND MONETARY (CENTRAL
BANK) AGGRESSION HAS PROVED DEEPLY
DAMAGING TO MARKETS AND TO WEALTH.
NOLAND DECRIES THE INSANE RISK AND
EXPECTS THE OUTCOME TO BE NASTY UGLY
AND NEGATIVE. $$$

The Japanese central bank is without options. Therefore, it will attempt to
spin wealth off the printing press.
Despite stock and bond market extreme
volatility, the Japanese central bank
remains steady in its destructive
hand. It aims to stoke 2% price inflation.
The new Kuroda BOJ had been on an
official campaign to push the JapYen
currency from 128 versus the USDollar
since October 2012, down to a 97 handle
in May, before the correction occurred
that lifted the Yen currency to the
105 level. Whether profit-taking or
sensible hand, it is unclear. The
proximal cause for financial market
losses was the spike in the 10-year
JapGovtBond yield (and the USTreasury
Bond 10-year yield), which pulled
the rug from the Nikkei stock index.
The investor jitters focused on the
dangerous dependence built by the
BOJ to keep afloat the funding and
servicing of its colossal public debt.
The most aggressive competitive devaluation
in recent history, conducted in Japan,
has not produced much beneficial fruit.
The gains from export trade were
offset by higher domestic price inflation.
The solution is toxic in nature, illusory
in practice. The most recent USFed
talking points of tapered stimulus
might have had the most brutal effect
in Japan, where the carry trade was invented two
decades ago.

In a unanimous vote, the Bank of Japan decided to hold steady on a policy to
grow its base money supply (cash plus
bank deposits) by between JPY 60 trillion
and JPY 70 trillion per year (=US
$600 to $700 billion). The delusion
is of stimulus, when the reality is
price inflation and shrinking profits,
which serve as a severe damper. Revised
Japanese Govt data indicated a 1.0%
GDP growth rate in 1Q2013, but the
Jackass believes the growth was improperly
gauged price inflation (a US trick learned by the Japanese dog). The
central banks are all justifying hyper
monetary inflation with deceptive
growth rationales. The aggression
was ordered in unprecedented manner
by new Prime Minister Shinzo Abe,
who crossed the line on central bank
independence. The goal since April
has been to jolt the Japanese Economy
out of 15 years of deflation, a key
initiative intended to produce wider
growth. The insanity is laced within
fiscal and monetary policy. A better
bolder solution would be to liquidate
some dead limbs in the big conglomerates,
to write down some Japanese Govt debt,
to bring home some outsourced industry
from China, to dump a giant truckload
of USTBonds, and to cut the phone
lines to the US Federal Reserve from
the Bank of Japan.

Under Haruhiko Kuroda, its new governor, the Bank of Japan pledged to double
the national money supply in two years
through aggressive purchases of government
bonds and other assets, with a 2%
price inflation banner on display.
Kuroda seems equally amateurish as
Abe. The BOJ head Kuroda actually
stated that the recent rise in long-term
interest rates is a healthy reflection
of inflation expectations, and does
not pose an immediate threat to the
Japanese economy. Wrong on both
counts for the rank amateur nitwit,
as rising price inflation will have
a dire profit impact, sure to render
damage to the vaunted export industry
at a time when cheaper Chinese labor
has invited extensive outsourcing.
The bond yield rise signals severe
funding problems (from low carry trade
income and from vanished trade surplus)
against a backdrop of fear, causing
capital flight. Any central bank
that cites inflation levels as target
is heretic and destructive in ways
not visible until the charred ruins
and ashes are examined more closely
in future years. Kuroda and Abe are
a tag team of wreckage from the monetary
and fiscal whiplash of the headache
wrecking ball located at the Tokyo demolition site, often confused with construction. The clowns
in the room focus on volatility, when
the real focus should be on undermine
to wealth, currency debasement, and
income deprivation. See the New
York Times article (CLICK HERE).

Doug Noland is usually mild-mannered, choosing to soften his words when he decides
to issue harsh criticism. The recent
months of insanity by the Bank of
Japan have motivated Noland to direct
a surprisingly harsh essay. He wrote
the following in late May. Strong
words, not minced words. See the Prudent
Bear article (CLICK HERE).

"When
a fledgling central bank chief, in
the midst of a radical and untested
experiment in monetary inflation,
promises to stabilize a nearly $14
trillion bond market, well, it is
time to begin worrying. My guess is
that is exactly what some of the hedge
funds and sophisticated leveraged
players began to do this week. Time
to begin taking some chips off the
table. The Kuroda Gambit was seen
unleashing enormous amounts of liquidity
upon global markets. At least this
perception was spurring a collapse
of sovereign yields and risk premiums
around the globe. Those caught short
in the melt-up in risk markets were
forced to run for cover, virtually
everywhere. Those hedging various
risks were forced to throw in the
towel, while those cautiously under-invested
in rapidly rising markets had little
choice but to throw caution to the
wind (capitulate). Radical BOJ measures
pushed already over-liquefied, speculation
rife, and highly unsettled markets
over the edge into speculative blow-off
type dislocations." Wow!

◄$$$ JAPANESE INVESTORS ON A YIELD HUNT IS NOT MATERIALIZING, TO THE FRUSTRATION
OF THE JAPANESE GOVT AMATEURS. THE
ENTIRE NATION SUFFERS A MASSIVE CASH
FLOW PROBLEM. $$$

In Tokyo, the Ministry of Finance published data that Japanese investors
were net sellers of foreign securities
for a fourth consecutive week. In
the period from June 2nd to June 8th,
Japanese investors sold a net JPY
386.9 billion (=US$4.1 bn) of foreign
bonds & notes and a net JPY 221.8
billion of foreign stocks in the week
ending June 8th. No rotation is evident
in moving from fixed income assets
in favor of stocks, no such Great
Rotation bandied about. See the Market
Watch article (CLICK HERE).

◄$$$ THE NEW BANK OF ENGLAND CHIEF CARNEY WILL DEVALUE THE BRITISH STERLING CURRENCY, P.I.M.C.O. WARNED. THE SPECTACULAR FAILURE IN JAPAN
MIGHT BE REPEATED BY LONDON.
BANKERS NEVER LEARN FROM ERRORS. THE
CLIMAX IN COMPETITIVE DEVALUATION
AS A SOLUTION AND TOOL WILL BE PUT
ON STAGE FOR VIEWING ITS SPECTACULAR
FAILURE. NEVER IS WEALTH PRODUCED
THE NEW-FANGLED WAY, BY CENTRAL BANK
ORDER. IT IS PRODUCED BY INDUSTRY
AND WORK, THE OLDFASHIONED
WAY. $$$

The British central bank is without options. Therefore, it will attempt to spin
wealth off the printing press. PIMCO
has released a research paper with
a warning. The bond king house,
the Bill Gross perch, expects the
newly anointed Mark Carney to try
to devalue the British Pound by as
much as 15%. He will wear the
London monetary
robe with scepter after he takes over
as Bank of England Governor in July. The desperation is thick.
The British realm followed the American
insanity by dispatching its industry
to Asia. They
replaced it with dependence upon asset
inflation. Next they followed the
American insanity again by building
a housing bubble with supporting bond
bubble. In the wake of the magnificent
busts, fully forecasted in 2005 and
2006 by the Jackass in the Hat Trick
Letter, the British fortress must
resort to a last ditch attempt to
spur a UKEconomic recovery. It is
doomed to fail. Systemic failure in
Britain
awaits on the other side, to occur
with its US colony.

Britain has selected the Canadian Carney,
the fall guy. His selection reflects
their miniscule confidence in a solution.
Never does a monetary solution compensate
for a generation of economic folly.
The benefits from the competitive
devaluation will be met with equally
disastrous consequences as seen in
Japan.
The illusory benefits will be overwhelmed
by introduction of price inflation,
lost corporate profitability, and
financial market turmoil. These are
the common Western economist blind
spots. A new round of money printing
(not wealth output) begins in July.
See the UK Telegraph article (CLICK
HERE).
The debasement of major currencies
soon will have all global cylinders
working in unison. Gold will go up
in all currencies, not yet shown on
the COMEX & LBMA marquee billboards.
These official exchanges must first
shut down.

## USTREASURY LIVE STRESS TEST

◄$$$ NUMEROUS REASONS WHY THE USTREASURY LONG-TERM BOND YIELD WILL NOT
BE PERMITTED TO RISE. DIVERSE RISKS
APPLY. EXPECT THE USFED TO BE OVERWHELMED.
THEY WILL ULTIMATELY FAIL. $$$

The TNX (10-yr USTreasury yield) cannot be permitted to rise:

1)big US
banks would reverse their carry trade
and accelerate the bond rout

2)derivative accidents would hit on
the Interest Rate Swap with huge fallout

3)USGovt deficit would go back to $1.5
trillion with huge borrowing costs

4)US housing market would crash again
in full view

5)USEconomy would turn for the worse
in obvious fashion

6)catastrophe to occur if TNX goes under
1% (success) or over 3% (failure).

The Bernanke Fed has been without options for a long time. They were forced
into ZIRP at the zero bound when the
system crashed. They were forced into
QE when foreign buyers disappeared.
They have been stuck in the ZIRP/QE
corner for over two years. The
USFed might be conducting an insane
Live Stress Test on its own volition.
The cornered central bank might also
be ordered to conduct a stress test
by higher powers, like at the BIS
to obtain a better sense of the global
collapse assured. They might be
conducting a test to calibrate the
derivatives required to do extremely
heavy lifting. They might be conducting
the test to sabotage Japan, as it moves closer
into the Chinese fold. It might NOT
be conducting a test at all, as foreign
creditors unload the USTBonds in greater
volume in the various channels. It
could be some Eastern forces have
learned how to interfere with the
Anglo derivative levers, to weaken
their function as the US financial
system is brought down on its own
crippled toxic USDollar and its own
ponzi toxic USTBond.

◄$$$ USTREASURY BOND SELLOFF HAS BEGUN. IT MIGHT HAVE A HIGHER GEAR IN
THE SELLOFF. PRESSURE IS ON THE USFED
AS LONE BUYER. THE EFFECT OF NEAR
ZERO BOND YIELDS IS COMING HOME TO
ROOST. A RETURN TO NORMALCY IS NOT
POSSIBLE, BUT RATHER AN EXPLOSIVE
OUTCOME WITH DERIVATIVE FAILURES AND
BANK FAILURES. $$$

When Goldman Sachs warns that a USTreasury Bond selloff has begun, then it is
time to worry. Either the venerable
crime tower has put shorts in place
to capitalize on the decline, or they
might actually see the decline as
inevitable. Wall Street should prepare
for a much bigger wrecking ball than
the Lehman Brothers failure if the
present path continues. An intermediate
reversal of the TNX has been confirmed
with rising bond yield on the 10-year
USTreasury Bond. A deadly dangerous
game has unfolded, with several viable
possibilities in explanation.
It is possible that a global rejection
has begun in force. It is also possible
that the lunatics at the USFed actually
believe they have an exit door available
to call a strategy indeed. Regardless,
Goldman Sachs has warned, and asset
managers are warning. The exodus is
being tested, and might blossom into
a stampede. The level of risk is
not measurable, surely grand, since
the USTBond asset bubble is the largest
in the history of mankind. The
recent auctions have been unimpressive,
with strange action at the tails,
while bid/cover ratios have been falling.
Let's watch the USFed balance sheet
expansion, because global buyers are
noooowwwhere! The primary bond dealers
are lined up for a slaughter, compelled
to buy that which is not purchased
at auction. See the CNBC article (CLICK
HERE)
and the Business Insider article (CLICK
HERE).

◄$$$ TREASURY SALES BY FOREIGNERS HIT AN HISTORICAL HIGH IN APRIL. A GATHERING
STORM HAS COME TO THE DOORSTEP OF
THE USGOVT AND ITS MASTER AT THE USFED.
JAPAN
AND ENGLAND
ARE SELLERS, BOTH BEING ALLIES. PLENTY
OF MORTGAGE BONDS AND US-STOCKS WERE
BOUGHT, EVIDENCE OF FOREIGNERS DOING
A ROTATION TOWARD EQUITIES. DESPITE
THE GLOBAL SELL-OFF IN EQUITIES, NO
REAL BID FOR USTBONDS WAS SEEN, EVEN
AT THE SHORT END. $$$

The monthly TIC Report data on foreign capital flows is chock full of data,
although in two month delay. In
April, official and private foreign
investors together sold $54.5 billion
of USTreasurys. The disgorge was the
biggest monthly sale of USTreasurys
by foreigners in the history of the
data series, like at least in over
twenty-five years. The global
rejection is in full swing. In distraction
to the core theme, foreigners increased
purchases of mortgage bonds by a hefty
$23 billion, while corporate bonds
were sold by $4.5 billion net. Strangely,
foreigners lined up for $11.2 billion
in US
stock purchases, displaying a lack
of insight and a bucket load of gullibility.
The rotation is evident for foreign
investors. See the Zero Hedge article
(CLICK HERE).
Clearly, Japan
has a cash flow problem and and must
sell USTreasurys. However, strangely,
a trap might be laid of unclear origin.
Some USTBond selling has come out
of the Caribbean banking center under UKGovt cover. Wall Street banks employ
the Caribbean centers in slush fund
management, as does the Bank of England
along with London
banks, and hidden offshore special
entities like they used with Enron.

The June 11th bond auction to sell $32 billion in 3-year bonds went very badly.
The bond yield spiked to 0.581%, a
relatively dramatic move up from last
month's 0.354% and the highest yield
since July 2011. At the surface, plenty
of turbulence. Beneath the surface,
more instability with the Bid/Cover
ratio plunging from 3.38 to only 2.95,
the lowest since December 2010. The
Direct Bid was only 8.4%, down from
14.6% and the lowest Direct interest
since August. Primary Dealers
had to absorb the remainder, equal
to 58.4% of the auction. They are
the victims in the bond game, compelled
to buy up overpriced bubbly USTBill
assets, likely to die in the crossfire
crush. The only good news is the interpretation
that with a mere 0.5% yield offered
to hold short-term USTBill debt, the
implied fear of an imminent USFed
rate hike is still far away. See the
Zero Hedge article (CLICK HERE)
and the Business Insider article (CLICK
HERE).

◄$$$ SECULAR END TO THE USTREASURY BOND MARKET IS POSSIBLY HERE OR NEAR.
A SCARY COUPLE WEEKS FOR THE USTBOND.
THE MAIN PLAYERS ARE JUMPING OFF.
$$$

Money is moving out of the USDollar, out of USTreasurys, while it threatens
to depart US equities. One is left
to wonder if big firms, big institutions,
and big players anticipate a significant
event coming soon. It could be geopolitical
or monetary. The Dallas Fed Governor
Richard Fisher told reporters, "This
is the end of a 30-year rally"
in bonds. He spoke about poor compensation
for risk, with non-existent spreads
to keep banks running. He implied
that the managed bond market could
not be managed anymore. He is not
alone. Bill Gross of PIMCO manages
the world's biggest bond fund with
$293 billion in assets. He was caught
writing a tweet that said, "the
secular 30-year market likely ended
on April 29th". Even the popular
but corruptly myopic Warren Buffet
said in May that bonds are a terrible
investment these days. Negative real
yiels are the bane of USTreasury Bonds,
and signal their demise, if only yet
a busted asset bubble.

The other side of the table is worth hashing out. With the powerful Interest
Rate Swap tool at the ready, it is
very difficult to see the USTBond
secular rally over. To be sure,
sitting at the high valuation and
low bond yield for two to three years
takes a toll, and leads to a teetering
tower. But with the IRSwap always
ready to have its lever pulled, it
seems like a Stress Test with some
hidden agenda at work. To be sure,
the USFed is petrified and frustrated
and desperate. They might permit a
step function rise, to see the reaction,
like every several weeks permit the
TNX to rise another 20 to 40 basis
points. Time will tell, but this will
not end well.

◄$$$ THE CRITICAL FAULT LINE LIES IN JAPAN.
A NEW PHASE IS UNDERWAY (HARDLY JUST
BEGUN) THAT EXPOSES JAPAN AS THE WEAK LINK IN THE SOVEREIGN BOND MARKET.
THE LATEST Q.E. PROGRAM AND PUMMELING
OF THE JAP-YEN CURRENCY IS CAUSING
GIGANTIC PROBLEMS. NEW DYNAMICS WORK
TO RIP JAPAN APART, LIKE HIGHER NATIVE COSTS, LOWER USTBOND INCOME, AND REDEMPTIONS OF J.G.BONDS. INCOME IS NEEDED
TO SUPPORT AN AGING POPULATION WITHOUT
BENEFIT OF TRADE SURPLUS ANYMORE,
OR CARRY INCOME. SOME EXPERT ANALYSTS
BELIEVE JAPAN WILL BE THE
FIRST FAILED STATE ON THE FINANCIAL
FRONT, AS NUMEROUS GRAND FORCES ARE
AT WORK IN THE NEXUS. $$$

Japan for the past two decades has survived
the deflationary impact on zero bound
rates and debt overload with nasty
implications. Its 1990 decade collapse
of the stock and housing markets were
tremendous in their impact, yet Japan continued.
It had the powerful advantage of a
giant trade surplus (and current account
surplus) with which to fund the deficits,
swapping into USTBonds and building
a huge FOREX reserve account. Their
exports provided a significant support
for the USTBond market and provided
Japan with massive cash flow. The reversal of
dynamics began to turn in the 1990
decade with the official Chinese devaluation,
later followed by the Asian meltdown.
The dynamics went critical when
China
was handed the outsourcing business
by many Japanese conglomerates for
building consumer products for the
Japanese in the last decade. CHANGE
HAS COME. The steady devaluation of
the USDollar and the lowering of rates
constantly has worked to reduce the
cash flow to Japan with double barrel impact. By year 2012,
Japan
had lost its famed trade surplus.
It could no longer fund its competitive
currency devaluation, thus exposing
its own JapGovtBond market as vulnerable.

A terminal state has recently arrived to Japan.
New dynamics have become wrecking
balls. Consumer demand globally is
weak for Japanese products at a time
when the Chinese outsource has undercut
the nation's previous dominance. The
Fukushima
nuke plant impact has forced higher
input costs from higher priced electricity,
even high insurance premiums. Hence
income from USTBonds has dropped dramatically.
Japan
faces the prospect of trade deficits,
with the attendant risks it is not
accustomed to dealing with. The Japanese
pension system has been compelled
to sell JGBonds in order to meet obligations,
since it cannot survive just on coupon
cash flow. The aging native population
aggravates the situation. The sales
of USTBonds and redemptions of JGBonds
work with negative synergy to wreck
the financial foundation of Japanese
banks, killer blows. As horrendous
as the fundamentals and newest trends
are in Japan, they are much worse in the United States. Together,
the central bank policies of ZIRP
& QE will work to kill the system.
But Japan
appears to be the fault line on the
crackup. Thanks to EuroRaj for some
excellent analysis points.

◄$$$ G7 BONDS ARE CRASHING ACROSS THE DEVELOPED WESTERN SPECTRUM OF NATIONS.
ALARM BELLS ARE RINGING. LIGHTS ARE
FLASHING. $$$

More than $2.5 trillion has been erased from the value of global stock market
since May 22nd when USFed Chairman
Bernanke warned that the USFed could
scale back stimulus efforts under
certain circumstances. The good chairman's
threat of Tapered QE has hit financial
markets (stocks & bonds) like
a cyclone. His condition was stated
as the labor market showing sustainable
improvement, which will never happen
under the ZIRP & QE double negative
condition. Bernanke is conducting
a Live Stress Test. It is not going
well. Havoc is seen on almost every
continent, since the world has grown
addicted to the USFed easy money spigot.
They are printing wealth in a mockery
session extended over three years.
See the Bloomberg article (CLICK HERE).

##
USTBOND DUMPED

◄$$$ USTREASURY BONDS ARE BEING GATHERED, READY TO BE RETURNED TO SENDER.
THE NEW YORK
AND LONDON
BANKS WILL CHOKE ON THEM. THEY CANNOT
REFUSE THE BONDS, REJECTED BY EASTERN
ENTITIES AND WISE WESTERNERS ALIKE.
AS THE EURASIAN TRADE ZONE DEVELOPS,
AS THE PETRO-DOLLAR FADES AWAY, AS
THE AFRICANS ENJOY A CONTINUED BUILDOUT,
EVEN AS THE BIG US-BANKS BEGIN TO
PANIC, THE USTBONDS WILL BE REJECTED
ALONG WITH THE USDOLLAR. PANIC WILL
ENTER THE USFED HALLOWED HALLS, AS
THEIR MACHINERY WILL FAIL TO HOLD
BACK THE STUFFED CHANNELS AND THIER
NASTY IMPACT. $$$

The public Jackass article entitled "USTBonds: Return to Sender"
was posted in early June. It laid
out the new vast channels for USTreasury
Bond redemption by angry disappointed
deceived and betrayed USGovt creditors.
They will convert them rapidly into
Gold bullion, as they reject fiat
paper wealth and pursue valid wealth.
The USFed is stuck without an exit
doorway, but foreigner creditors have
begun executing on an Exit Strategy
from the USDollar entirely. The main
commercial pillar in the Petro-Dollar
defacto standard is to see sunset
with the imminent death of King Abdullah.
Watch the Natural Gas Coop led by
Gazprom next wrest control. Very significant
main channels have already begun to
form, with the BRICS Development Fund
to convert to a Gold Trade Central
Bank, with the Rosneft acquisition
of British Petroleum with unusual
buyout terms, and with payment by
China for Russian pipeline energy supply. Look
also to the rapid conversion of Russian
and Chinese FOREX reserves, with African
resource deals paid by China, and with Saudi conversion of recycled oil
surpluses during the Fall of the House
of Saud.

The domestic wild card could very well be the calamity
of the big US
bank carry trade put in reverse gear
in a great unwind. They are highly leveraged, fully
committed to both free money on the
short end and falling bond yields
on the long end. A convexity event
is in the making. The next several
months might see the beginning of
a truly fierce rejection of USTreasury
Bonds, returned with visceral disgust
to the sender, the USGovt, in very
large torrential volume. The process
will surely overwhelm the Weimar press operated by a desperate Bernanke.
They will ramp up their Interest Rate
Swap machinery, and their basic bond
monetization schemes. Their actions
will go directly against all claims
of a return to normalcy. No tapering
of QE will be the case, only empty
words. The USFed balance sheet is
not only a disaster zone, but it is
not recoverable. See the Gold Seek
article (CLICK HERE).

It is very tough to foresee it all, but the Jackass expects
with near certainty a vast channel
stuffing flow of USTBonds in return
routes to New
York and London destinations. The process will force the USFed
to greatly amplify their bond monetization
and derivative backstops in order
to avoid fast rising bond yields.
Once more their marquee policy billboard
will be dismantled as propaganda,
like in 2009. Then the entire platform
stage will fall down when Eastern
trade kicks in with Gold Trade settlement.
Its introduction will represent the
long awaited USDollar rejection, led
by Russia & China. It is truly a mystery why 95% of analysts
and smart observers miss totally the
gold trade settlement card and fail
to comprehend its imminent shock wave
impact. It is to be a colossal disruption,
which will enable trade to settle
outside banks and the FOREX. When
it happens, the West will find themselves
managing markets with both hands on
the printing press and futility filling
the air.

◄$$$ CHINA WILL START UP A FINANCIAL
UNIT TO DIVERSIFY RESERVES HELD AS
USGOVT DEBT SECURITIES. THEY WILL
CONVERT USTBONDS INTO PROPERTIES AND
INDUSTRIES, RIGHT IN NEW YORK CITY. $$$

The USDollars are indeed coming back home. The big Chinese sovereign wealth
fund has made an important decision.
The State Admin of Foreign Exchange
(SAFE) has set up an business office
in New York City, which will make alternative investments in the United
States. The obvious
targets are to be commercial property
and midsized industries. The major
US, Australian, Mexican, and Brazilian
port facilities are already secured
Chinese assets in possession. See
the Bloomberg article (CLICK HERE) that cites the Wall Street Journal.

The Chinese property office will join with numerous other
toxic paper processing plants to offload
USTreasury Bonds. Combine with the BRICS Development
Fund for processing USTBonds. Combine
with the Eurasian Trade Zone energy
pipeline payments in USTBonds back
to London banks. Combine with Russian and Chinese
conversion of FOREX reserves. Combine
with Saudi and other Emirate redemption
of USTBonds. Conclude the SAFE Fund
processor will be yet another grand
garbage can for toxic paper sewage
treatment. The ironic twist will be
the Wall Street banks selling USTBonds
in demos of lethal convexity, escaping
their leverage, turned antagonistic
with the central bank maestro.

◄$$$ BILL GROSS MAKES OBSERVATIONS ON THE BIZARRE BOND MARKET. THE TINY
BOND SPREADS TRANSLATE TO INADEQUATE
CARRY IN THE BANKING SYSTEM THAT CARRIES
BONDS AND EARNS A PROFIT (SUSPECT
TO BE SURE). THE USECONOMY IS STRAINING
AND AT GREAT RISK FROM A VERY SMALL
CARRY PROFIT IN THE ENTIRE FINANCIAL
SECTOR. THE USECONOMY AND ITS FINANCIAL
ARTERIES ARE SUFFERING FROM OXYGEN
DEPRIVATION. HE ADVISES STRUCTURAL
SOLUTIONS, NOT MONETARY SOLUTIONS.
$$$

Last month the Jackass cited the insurance industry as
being at great risk from inadequate
profit in order to finance its costs
and payouts. Bill Gross of PIMCO makes
a more sweeping argument that financial
markets require carry (the spread
from long-term bonds to short-term
bonds) in order to pump sufficient
oxygen to the real economy. The current carry is compressed,
as yields, spreads, and volatility
are at historical lows. The cockeyed
USFed monetary strategy assumes that
higher asset prices will revigorate
growth. But it is not working. The
oxygen flow happens to be more focused
on carry profit from financial firms.
Not just insurance firms but retirees
on fixed income from their bonds and
bank certificates of deposit have
turned to poverty, victims of their
own savings portfolio. Corporate finance
groups cannot extract enough carry
profit from commercial paper either.
The end result of four years of absurdly
low interest rates is not stimulus,
but rather reduction of risk and smaller
carry profits. In other words, suffocation.

By the end of the 1990 decade, many analysts concluded that the Decade of (Stolen)
Prosperity under the Clinton Admin
was built upon rising stock prices.
It was not. Instead, it was actually
built upon falling interest rates
and massive carry trade profit. The
most important element to the USEconomy
profit structure is favorable borrowing
costs and the carry profits in finance.
Of course, the stolen aspect was from
theft of Fort
Knox to finance
the falling interest rates. Carry
profit is like the ocean currents.
While the nation was ensconced with
the irrationally exuberant stock gains,
Clinton and Papa Bush stole $1.5 trillion
from Fannie Mae. It is well documented
by CAFitts, auditor to the Govt Sponsored
Enterprises. Bush tried to murder
her for the discovery, just like he
succeeded in murdering mother to Fitts
in the 1970 decade, for her work in
tracking the nascent CIA narcotics
business. The mother worked as economist
in the Arthur Burns Fed. The Oklahoma
City federal building bombing in 1995
was done to eliminate the data records,
and to cover up the Fannie Mae thefts,
centered upon the Texas, Oklahoma, and Arkansas districts of management.

Just as profits are critical to the longevity of the capitalistic real economy,
bond returns known as carry trade
are critical to the financial markets.
Lacking the carry profit, due to
suppressed interest rates, investors
are unwilling to risk financial capital.
Hence a slow death from lack of oxygen.
The carry most commonly arrives as
a risk premium, a potential amount
of gain to investor principal. Corporate
and high yield bonds, stocks, private
equity and emerging market investments
are financial assets that apply for
earning a carry profit. When under
25 basis points offered by the current
USFed official rate, investors shun
the opportunity. Gross describes a
reduced beta for the financial markets
from the tiny carry profit laced through
the sick system. He called carry the
beating heart of the financial markets
and ultimately the real economy also.
Profits derived from paper assets
are inextricably linked to profits
in the real economy, which are inextricably
linked to investment and employment,
in his words. When these profits are
meager, the heart is wounded and slowly
dies, taking down the real economy.
Bill Gross said the following.

"Low
yields, low carry, future low expected
returns have increasingly negative
effects on the real economy. Granted,
Chairman Bernanke has frequently admitted
as much but cites the hopeful conclusion
that once real growth has been restored
to old normal, then the financial
markets can return to those historical
levels of yields, carry, volatility,
and liquidity premiums that investors
yearn for. Sacrifice now, he lectures
investors, in order to prosper later.
Well it has been five years and the
real economy has not once over a 12-month
period of time grown faster than 2.5%
[after phony GDP adjustment lifts].
Perhaps, in addition to a fiscally
confused Washington,
it is your policies that may be now
part of the problem rather than the
solution. Perhaps the beating heart
is pumping anemic, even destructively
leukemic blood through the system.
Perhaps zero-bound interest rates
and quantitative easing programs are
becoming as much of the problem as
the solution. Perhaps when yields,
carry, and expected returns on financial
and real assets become so low, the
risk-taking investors turn inward
and more conservative as opposed to
outward and more risk seeking. Perhaps
financial markets and real economic
growth are more at risk than your
calm demeanor would convey." This is a complete slam against Bernanke and his failure.

The Jackass work has called this a grand deterioration
of the entire USEconomy. It is finally being recognized by the elite analysts.
Gross believes that the US heart is pumping more blood
through the system, but the zero-based
policy rates and global quantitative
easing programs assure the blood has
become anemic and oxygen starved.
The point made by Gross runs parallel
to the Jackass argument of ZIRP &
QE resulting in destroyed capital
and retired capital from a higher
cost structure. He calls the global
financial system at the zero-bound
similar to a leukemia patient with
New Age chemotherapy. He admonishes
the USFed for its failed desperate
attempts to cure an economy that requires
structural as opposed to monetary
solutions. The Jackass has claimed
that liquidity cannot cure an insolvency
problem. We weave a coordinated
critical argument. See the PIMCO research
article (CLICK HERE).

◄$$$ NEGATIVE T.I.P.S. BOND YIELDS ARE A DISRUPTIVE PART OF THE GLOBAL
FINANCIAL SYSTEM, A PHONY METER. TIED
TO THE GLOBAL RESERVE CURRENCY, THE
USGOVT DEBT HAS TURNED UPSIDE DOWN.
RISING DEBT BY FORCE RESULTS IN LOWER
RATES IN ORDER TO ACCOMMODATE THE
BORROWING COSTS. THE RISK RETURN IS
NON-EXISTENT. THE BOND MARKET IS A
WRECK. HIGHER DEBT LEVELS TRANSLATE
TO LOWER INTEREST RATES IN THE CORRUPT
BOND MARKET. $$$

Debt saturation kills the host, leading to USTBond investment and the 0% bound,
rather than to business investment.
However, the full story is worse.
The two years of monetizing the Treasury
Investment Protection Security (TIPS)
has become a travesty, a perversion,
a wreck, a joke. No protection from
inflation can come if monetary inflation
is directed at the same instrument
designed for its protection. The
USFed purchases as part of QE monetary
easing serve as a vast undermine to
integrity, a grotesque insult to the
security, a falsifcation of the inflation
protection. Finally, the farcical
TIPS bear a negative yield, at minus
0.244% from a recent sale. Try not
to laugh so hard that you pee your
pants. The late May auction to sell
$13 billion in 10-year inflation indexed
notes drew a negative yield, according
to a Bloomberg survey of eight primary
dealers who operate as part of the
USFed system. The aberrant phenomenon
is not new. The last offering of
10-year TIPS, a $13 billion sale on
March 21st, drew a yield of negative
0.602%, the eighth consecutive time
an auction of the securities yielded
less than zero. The record auction
low of negative 0.75% was reached
on September 20th. The TIPS bond is
as skewed as the Consumer Price Index.

The travesty known as TIPS has for months paid less than the official USGovt
price inflation index, which itself
is suppressed. So the TIPS offer no
protection, even versus the tilted
CPI. The insult to the integrity of
TIPS is compounded by the moronic
sheeple response. The March sale realized
a bid-to-cover ratio of 2.74, which
gauges demand by comparing the amount
bid with the amount offered. The ratio
is steady, having seen an average
of 2.69 for the past 10 sales. Morons
are at the bid. Witness an outrageously
corrupted TIPS bond market. Price
inflation is everywhere. Protection
is nowhere, except in Gold & Silver,
surely not the rubbish sold as TIPS.
Bank of Ameria estimated that TIPS
securities gained 7.3% in year 2012,
compared to 2.2% in the overall USTreasury
Bond market. However, this year TIPS
securities have lost 2.8% in value.
The inflation linked debt securities
have fared better than the TIPS generally
as well. Recent TIPS losses have marked
their worst monthly performance since
October 2008. The QE programs have
destroyed the TIPS completely, with
no publicity.

A much more perverse phenomenon is easily revealed. As USGovt debt has risen,
the US bond yields have fallen. The opposite should
be the case, if risk is rewarded,
if profligacy is punished, if fundamentals
are reflected, if the market has integrity.
Risk is not rewarded with USTreasury
Bonds. Their Third
World debt and income fundamentals
are not reflected in higher yields.
The USTBond market has no integrity.
Since 1983, USTreasury Bond yields
have been declining while USGovt debt
spirals upward out of control. The
USGovt debt is over $16 trillion.
Even a minor rise in interest rates
would result in a crushing rise in
borrowing costs. Expedience dictates
by sheer force that USTBond yields
remain low. Rather than wrecking the
bond market, the bankers at the helm
in the control room have slowly wrecked
the USEconomy, by kill ing capital
slowly and inexorably. Lower rates
are linked in tight fashion to the
total federal debt, which forces the
continual cycle of slowing the USEconomy
further with a grand damper. They
have no relation to price inflation
or debt risk, not anymore, not in
Reich Finance. Higher debt means lower
interest rates, the equation of the
new world!

◄$$$ MAY BECAME THE 4TH LARGEST SPENDING MONTH EVER FOR THE USGOVT, WHICH
HAS NO DISCIPLINE, DESPITE THE SEQUESTERED
SPENDING CUTS MANDATED (BUT IGNORED).
ALMOST EVERYTHING, IT SEEMS, IS EXEMPT.
THE USGOVT IS TOTALLY OUT OF CONTROL.
DEFICITS MEAN MOVEMENT AND PROGRESS.
THE CHARADE CONTINUES UNTIL THE USGOVT
DEBT DEFAULT. $$$

The USGovt celebrated the phony spending austerity movement in May with the
fourth largest month of spending in
US history. Every April records
a surplus on the month, due to tax
collections, along with remittances
from the USFed and Govt Sponsored
Enterprises (the Fannie Mae criminal
project). The April surplus was over
$112.9 billion, which led some clueless
fools to wonder if the federal profligacy
was coming to an end finally. They
forgot that war, security, and administration
was almost all exempt. The US
austerity was not to happen. The Jackass
expected some exemptions, and maybe
slightly less spending, but not so.
A deficit of $138.7 billion was
posted for the May month, the largest
May deficit since 2009. The USGovt
budget deficit in May was aggravated
by a 10% increase in spending. There
were some shifts in the timing of
payments compared with May 2012. An
important distinction did occur. The
USGovt spending for May at $335.9
billion was the largest May outlay
in history. It was the fourth
greatest spending month ever. The
dysfunction of WashingtonDC is structural,
unfixable, and permanent, certain
to end only with a debt default. More
cheers than tears are certain when
the default event occurs. Refer to
the great debt restructure in future
years, not so far into the future.

The USGovt funding challenge will remain spurious and murky. The debt level
is currently at the debt ceiling limit
with only fuzzy legislation enabling
critical functions to push deficit
spending higher. The federal federal
pension funds are actively being raided
in order to pave additional spending,
the usual tactic. My contacts referred
only to one particular agency with
directly witnessed experience. A subscriber
noted that the Transportation Safety
Admin attempted to cut back on air
traffic controllers and related functions.
The result was a grand snafu that
resulted in even greater deficit spending
to bring the systems back to full
staff power, as massive problems had
to be resolved. They pursued and were
granted an exemption, which permitted
the spending. See the Zero Hedge article
(CLICK HERE).

◄$$$ USDOLLAR IS IN IMMINENT DANGER OF LOSING ITS WORLD RESERVE STATUS.
IT IS FAST LOSING CREDIBILITY. ITS
CUSTODIANS ARE UNDER SCURRILOUS CRITICISM.
ITS CENTRAL BANK HAS TURNED COMPLETELY
WEIMAR
IN GROWING RECOGNITION. FOREIGNERS
HAVE TURNED HOSTILE. MYRIAD REASONS
LEAD TO CONCLUDE THE UNFIXABLE DEFICITS
WILL CONTINUE TO GROW, DUE TO POLITICS
AND STRUCTURE. THE CHINESE YUAN WILL
SUPPLANT THE USDOLLAR AS GLOBAL FLAGSHIP,
AS THE SWAP FACILITIES ENABLE TRADE
PAYMENTS AND THE YUAN CONVERTIBILITY
ENABLE CHINESE GOVT BOND INVESTMENT
FOR BANKING SYSTEMS. $$$

Although the USDollar continues to reign as the foreign reserve currency, a
new Intl Monetary Fund review has
revealed that the Greenback has fallen
in central bank usage. Global usage
is at a 15-year low. The USDollar
is in the process of losing its exalted
status. Dick Bove at Rafferty Capital
Markets commented that the USD
constitutes 62% of the $6 trillion
in foreign holdings by the world's
central banks. However, the actual
percentage of total USD in the money
supply worldwide has gone from 90%
in 1952 to 15% today. Most of
the decline has occurred in the last
several years. Bove has joined a chorus
of other analysts who believe that
the rise of the Chinese Yuan has come
at the expense of the USDollar for
safe haven service. A decade ago it
was the rise of the Euro as a co-reserve
currency. Bove said, "Generally
speaking, it is not believed by
the vast majority that the American
dollar will be overthrown. But it
will be. This defrocking may occur
in as short a period as five to 10
years. The ratings agencies are already
arguing that the government's debt
may be too highly rated. Plus, the
United
States Congress,
in both its houses, as well as the
president are demonstrating a total
lack of fiscal credibility."
The path of gradual decline will eventually
be interrupted by a near total rejection,
when the Gold Trade Settlement kicks
in. That prospect has the Western
bankers pissing their pants and soiling
their boxers. Evidence was ample in
the G-20 Meeting interrupted in Ankara
in May.

The impact will be the US falling into the Third
World, as a result of price inflation,
supply shortage, and increased isolation.
The shock would be driven by the USGovt
having to finance its own deficits,
which have been stubbornly over the
$1 trillion mark in successive years,
a correct Jackass forecast made in
2009. The demands to roll over and
pay back debt will result in a debt
default through restructure. A global
summit will be held for the restructure
in a future year. The domestic
US
players will agree, so as to halt
the economic disorder and social chaos.
The foreign players will agree, so
as to put the USDollar to death.
The entire budget battle and failed
sequestered cuts have eroded seriously
the confidence in the US
fiscal state. Since the 2011 debt
downgrade by Standard & Poors,
no progress has been made on budget
balance, the stated requirement to
return to a stable official outlook
by the rating agency. The movements
to watch are the Chinese Yuan Swap
Facility and the convertible Yuan
currency. More nations are joining
the swap list for Chinese trade, which
avoids USDollar settlement. The list
has critical global mass. The kicker
is clearly the Yuan convertibility,
which will permit quick exchange into
all major currencies in their capital
account. Progress has been made on
this important account.

Beijing leaders have made the convertibility
a high priority in recent months.
Any solid progress will open the
door toward foreign investment in
Chinese Govt Bonds, yet another undercut
to the USTBond stronghold in global
bank reserves that serve in foreign
banking systems as foundation.
The security issue for the United
States should
not be foreign terrorism (a total
ruse), not nuclear threats from North Korea (pure proxy diversion),
or eavesdropping (a valid Big Brother
issue), but rather the restoration
of fiscal responsibility and the elimination
of the deficit (internal rot &
decay). That goal is impossible under
the current regime with their favored
banks and predatory endless wars.
These people are after all nazis in
power, out of uniform, speaking the
native English language, but showing
off the flag they captured at press
conferences.

Michael Pento of Pento Portfolio Strategies said, "The #1 security issue
we have as a nation is the preservation
of the USdollar as the world's reserve
currency. It is a thousand times more
important than a nuclear bomb being
tested by North
Korea. It is
a thousand times more important that
we keep the dollar as the world's
reserve currency. Yet we are doing
everything to abuse that status."
Fully agreed by the Jackass, but Pento
seems not to attach the risk of lost
global reserve currency stewardship
with the advent of Third World Amerrka
as consequence. The abuse comes as
a direct consequence to having unsound
money (debt foundation), massive overt
and covert big bank welfare aid (instead
of liquidation), devotion to predatory
wars (narcotics, oil), a bloated socialist
network (SS, Medicare, welfare, disability),
profound corruption ($trillion thefts
like within Fannie Mae, JPMorgan counterfeit
of USTBonds), and colossal pork projects
(bridges to nowhere). See the RT News
article (CLICK HERE). The most
important abuses are refusal to liquidate
the insolvent big US banks, since they possess the political power
and control room offices, and the
endless wars which enable vast defense
contractor profits and thefts, along
with national gold vault raids (see
Libya and Iraq). Over 95% of the US populace is unaware of
these listed abuses, which can be
expanded easily in a longer list that
fills a full page.

◄$$$ THE USTREASURY BOND MARKET IS A PONZI SCHEME. $$$

Scott Minerd is global chief investment officer at Guggenheim Partners. He openly
calls the USTBonds a Ponzi market.
Colorful descriptions by others have
recently included allusions to mad
scientists, the Weimar Gauge, even
heroin treatment programs with methadone.
Minerd says the central bank has
effectively turned the USTreasurys
market into a Ponzi market, since
fraud is perpetuated by repaying one
investor with the principal of another
investor, as the price rises.
The principal bond value has peaked
in the past few months, as the Live
Stress Test continues. The crux of
his argument is that the USFed's bond
purchase program (Quantitative Easing)
has introduced false confidence into
the market, because investors believe
USTreasury investments will continue
to increase in price and be sustained
by the USFed itself. Perception of
value is no longer a part of investor
thought. The value of the USGovt
sovereign bond assets has become disconnected
from its underlying value, a basic
Third World bond
security. Someday in the future, the
USFed will curtail its purchases and
the entire scheme will unravel, just
like the Madoff Fund fraud. An intriguing
disconnect has occurred. Minerd
identified a breakdown in a longstanding
relationship between the inflation-adjusted
USTreasury 10-year Note and the Univ
Michigan consumer confidence index.
The two have historically moved in
tandem, but that relationship broke
down at the end of 2011 when the QE
initiative entered a higher gear.
Minerd wrote, "The yield on
10-year Treasurys would be roughly
150 basis points higher than it is
today, if the market was not being
distorted by Ponzi (uneconomic) buying."
He has sounded the Ponzi alarm
in the past regularly. See the Market
Watch article (CLICK HERE).